✅ 100% Bonus Depreciation Is Back
Businesses can fully deduct the cost of qualifying property in the year it’s placed in service. The bonus depreciation provision has been restored and made permanent, giving companies stronger upfront tax relief for equipment, machinery, and other eligible assets.
📉 QBI Deduction for Pass-Through Entities
The Qualified Business Income (QBI) deduction (typically up to 20% of qualified income for pass-through entities like LLCs and S-corps) is now permanent, which provides ongoing tax savings for many small-business owners. There’s also a minimum deduction of $400 for eligible businesses.
🧪 Immediate Deduction for R&D Expenses
Businesses investing in domestic research and development may now deduct R&D costs immediately, rather than amortizing them over several years—making it easier to reduce taxable income in the year the costs are incurred.
🏭 Expanded Section 179 Deduction
The Section 179 deduction—which lets companies deduct the cost of certain property—has been expanded, allowing higher deduction limits and encouraging reinvestment in equipment and infrastructure.
💼 Favorable Interest Expense Rules
New guidance allows some businesses to add back depreciation and amortization when calculating limits on business interest deductions, which can result in a more favorable deduction for companies reliant on capital financing.
💰 SALT Deduction Cap Temporarily Increased
While this affects both individuals and businesses with pass-through income, the state and local tax (SALT) deduction cap has increased to $40,000 for taxpayers with adjusted gross income under certain thresholds, offering potential relief for business owners in high-tax states.
📈 Other Key Business Tax Rules
The corporate tax rate remains 21%, with no major rate increases currently enacted for tax years beginning in 2025.
Opportunity Zones remain permanent, continuing incentives for investment in designated areas.
Some clean-energy related tax credits are being phased out or limited for new projects, though specific business credits may vary.
🧠 Planning Tips for Business Owners
✅ Take advantage of full expensing for qualified assets placed in service in 2025.
✅ Ensure you’re optimizing QBI deductions if you’re a pass-through business.
✅ Review R&D and Section 179 opportunities to reduce taxable income now.
✅ Work with your tax advisor to evaluate how SALT changes affect your planning and entity structure.