Top 5 Tax Changes from the July 2025 Big Beautiful Bill Every Small Business Owner Should Know
On July 4, 2025, Congress passed sweeping new tax legislation aimed at encouraging investment, simplifying deductions, and promoting workforce development. While much of the media focused on individual tax relief, the bill contains several powerful updates that directly affect small and mid-sized businesses. Here are the top five changes every business owner should know:
1. 100% Bonus Depreciation Is Back—Permanently
One of the most impactful changes: 100% bonus depreciation has been permanently reinstated for qualified property placed in service on or after January 19, 2025. This means your business can fully expense equipment, vehicles, and other eligible property in the year it’s placed into service—no more waiting years for depreciation deductions.
Note: Property placed in service before January 19, 2025 may still be subject to the old phase-out percentages (e.g., 40%), depending on contract dates.
2. Expanded Section 179 Deduction Limits
The Section 179 limit for immediate expensing of qualifying business purchases has been increased to $2 million (previously $1.22 million). This change gives businesses even more flexibility to deduct investments in equipment, software, and non-structural improvements to commercial property.
3. New Hiring Credit for Underserved Communities
A brand-new payroll tax credit rewards businesses that hire employees from certain underserved or economically distressed communities. If your hiring plans include expanding your team in 2025 or beyond, this credit could offer up to $5,000 per eligible employee per year.
4. Increased Deduction for Business Start-Up Costs
For entrepreneurs and new ventures, the bill raises the deductible limit for start-up costs from $5,000 to $15,000. This includes expenses related to formation, consulting, training, and other pre-launch activities. It’s a win for innovation and new business creation.
5. Stricter Reporting for Digital Payment Platforms
If you use apps like Venmo, PayPal, or Square for business transactions, take note: Third-party platforms must now report annual gross payments over $600 to the IRS. This means recordkeeping needs to be tight—miscategorized personal/business transactions could trigger IRS notices.
Final Thoughts
The July 2025 tax bill presents valuable opportunities for small business owners—but only if you act strategically. Whether it’s timing purchases, documenting hiring efforts, or revisiting your estimated tax payments, a proactive approach can translate into real savings.
Have questions about how these changes affect your specific business? Let’s talk. We’re here to help you build a smarter, more tax-efficient 2025.