E-filing of W2s and 1099s
Taxpayers must e-file W-2s and 1099s if they are filing more than 10 forms total. Penalties apply to any paper filed forms in excess of 10. Plan ahead and obtain W-9 information from your service providers well ahead of the January 31 deadline.
Standard mileage rates
Beginning on 1/1/2025, the standard mileage rates for the use of a car are 70 cents per mile driven for business, 21 cents per mile driven for medical or military moving, and 14 cents per mile driven in service of charitable organizations.
Business meals and entertainment deductions
Meals remain a 50% deduction in 2025. Entertainment is not deductible.
Simplified employee pension (SEP)
Contribute as much as 20-25% of your net earnings from self-employment, up to $70,000 for 2025.
100% Bonus Depreciation
Starting with assets purchased after January 19, 2025, businesses can once again fully deduct the cost of qualifying equipment, software, vehicles, furniture, and land improvements in the first year. This 100% bonus depreciation is now a permanent feature of the tax code. While this immediate expensing can significantly reduce your 2025 taxable income, it’s important to plan strategically. Using all deductions now may mean missing out on valuable deductions in future years when they could be more beneficial.
Domestic R&E Expenses
The new law allows taxpayers to fully deduct U.S. research and experimental (R&E) expenditures for tax years beginning after December 31, 2024. Deciding whether to take this deduction, how it interacts with the research credit, and whether retroactive relief is available will depend on your specific situation. Consult us before filing or amending returns to ensure you’re making the best choice.
Qualified small business stock (QSBS) gain exclusion
For stock acquired after July 4th, 2025 there have been expansions to the stock requirements. These include a graduated exclusion for how long the stock has been held, exclusion increased to $15M and the gross asset limitation has increased to $75M. Both of these are indexed for inflation adjustments.
Business charitable contributions
Starting in 2026, corporations will only be able to deduct charitable contributions to the extent that they exceed 1% of their taxable income. While the overall charitable deduction limit will remain at 10% of taxable income, any contributions below the 1% threshold will be lost. However, contributions that exceed the 1% floor but are still subject to the 10% cap can be carried forward for up to five years, allowing them to be used in future tax years before being forfeited.
Qualified Business Income (QBI) Deduction Made Permanent
The 20% deduction for pass-through business income is now permanent and will not expire after 2025. The phase-in threshold has increased to $75,000 for single filers and $150,000 for joint filers, after which wage/property or other limits may apply. Additionally, active owners with at least $1,000 of QBI are guaranteed a minimum $400 deduction.
Excess Business Loss Cap Now Permanent
Business losses are now permanently capped at $313,000 for single filers and $626,000 for joint filers. Any disallowed losses will be carried forward as Net Operating Losses (NOLs).
Energy and Green Credits
Most clean energy credits, including those for vehicles and commercial property, will expire for property placed in service after 2025 or 2026.
