Tax rules are never static—and 2025 brings several updates small business owners need to understand to stay compliant and strategic. Whether you're running a sole proprietorship, an LLC, or an S Corporation, being proactive with these changes can mean the difference between overpaying and optimizing.

Let’s break down the key updates and what you should be doing about them now.

1. Section 179 & Bonus Depreciation Changes
The 100% bonus depreciation phase-out continues in 2025. That means new equipment, vehicles, and other assets placed in service this year may not qualify for full expensing.

-- Consider timing large purchases and check with your tax advisor to maximize your write-offs before limits reduce further.

2. Updated Standard Mileage Rate
The IRS has increased the standard mileage rate again for 2025. This affects how you deduct vehicle use for business purposes.

-- Track mileage diligently and update your reimbursement rates for employees and contractors accordingly. Use an app like MileIQ to ensure your miles are consistently being logged and none are being missed!

3. 1099-K Reporting Thresholds
Third-party platforms like Venmo, PayPal, and Square now report payments over $600 for business transactions. Many small business owners may be receiving 1099-Ks for the first time.

-- Make sure your bookkeeping separates personal and business payments—messy records can trigger audits.

4. Qualified Business Income (QBI) Deduction Adjustments
The income thresholds for the QBI 20% deduction have been updated for inflation. For high earners, limitations and phase-outs now apply at higher levels.

-- Consider how your income structure (wages vs. profit) affects your eligibility—and whether an S Corp election can help.

5. Payroll & Compliance Updates
Wage base limits for Social Security and other employment taxes may have shifted. States may also have enacted new local compliance laws.

-- Review your payroll systems and ensure you're withholding and remitting properly—penalties can stack fast.

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Running a small business is challenging enough without having to decode every tax change yourself. By staying informed and planning ahead, you can reduce your tax burden and keep your business moving forward.

Not sure how these changes impact your business? Book a strategy session with Savvy Tax Strategies and get personalized insight to keep more of what you earn.