As you've probably heard in the news, the recent tax bill that was passed involves many helpful deductions for small business owners!

Before getting into some of the overall aspects, it's important to know that before this bill was signed, the individual tax rates would have increased starting next year. So, chances are that alone saved you thousands in taxes. Here are some points that are included in the bill.

Supercharged Expensing & Depreciation

100% Bonus Depreciation

Under the new law, you can immediately deduct 100% of the cost for eligible property and equipment you buy after January 19, 2025.

• What qualifies? Tools, machinery, vehicles—even office furniture—so long as it's new, used predominantly for business, and acquired after the cutoff date.

• Under standard depreciation rules, specific equipment or tools purchased would not receive an immediate deduction. Instead, it would be spread out over several years.

Section 179 Expensing

Additionally, Section 179 lets you deduct the full cost of qualifying purchases (like power tools, computers, or trailers) in the year you place them in service—up to $2.5 million in total purchases. This is a significant increase from previous years.

Qualified Business Income Deduction is Here to Stay

If you didn't already know, sole proprietors, partnerships, and S-corporations can permanently claim a 20% deduction on qualified business income. This has been a significant deduction for many small businesses in recent years and was going to be taken away at the end of this year - but it's here to stay!

• Example: If your profit for the year is $200,000 and you qualify, you may deduct up to $40,000 before calculating your tax — potentially saving thousands.

Key Individual Income Tax Breaks

Here are some notes on your individual taxes and perks coming:

• Higher Standard Deduction

  • $31,500 for married filing jointly

  • $23,625 for head-of-household

  • $15,750 for single filers

  • These amounts will rise with inflation each year, making it easier to take the standard deduction instead of itemizing.

• Above-the-Line Charitable Deduction

• Even if you don't itemize, you can deduct up to $1,000 ($2,000 married) in cash gifts to charity. It is a small way to support causes you care about and lower your taxable income.

• Expanded Child Tax Credit & Care Credit

  • Child Tax Credit up to $2,200 per child (indexed to inflation).

  • Child & Dependent Care Credit covers up to 50% of qualifying care expenses (phases down for higher earners but never below 20%).

Putting It All Together

These tax savings, such as permanent business deductions and individual tax boosts, look good. Remember, tax laws can be complex, and these provisions come with eligibility rules and phase-outs. Schedule a review with your accountant to ensure you're claiming every deduction and credit available. A small investment in planning can pay off big when you file your return.

Don't already have an accountant or tax preparer? Feel free to schedule a call to see if we'd be a good fit for you.