The 2025 Tax Reform (OBBBA): What Small Business Owners Need to Know

Written By Phillip Dishion

In 2025, Congress passed the One Big Beautiful Bill Act (OBBBA) — a sweeping tax reform that significantly impacts small business owners. From permanent lower tax rates to expanded write-offs, this new law creates both opportunities and potential pitfalls.

Here’s a breakdown of the most important changes and how they may affect your business.

Lower Individual Tax Rates Made Permanent

If your business is a sole proprietorship, partnership, or S corporation, your profits flow to your personal tax return. The good news: OBBBA makes the reduced individual tax rates permanent, eliminating uncertainty and offering a clearer tax planning runway.

What to do:
Review your current business structure. This may be a good time to reassess whether an S corp election or restructuring would benefit your situation.

Higher Standard Deduction

Beginning in 2025, the standard deduction increases to:

  • $15,750 for single filers

  • $23,625 for heads of household

  • $31,500 for married couples filing jointly

This could reduce your taxable income even further and may eliminate the need to itemize.

Expanded Bonus Depreciation & Section 179 Expensing

The new law extends and enhances your ability to write off business purchases immediately — including equipment, furniture, and technology.

What this means for you:
If you're planning to invest in your business, you may be able to deduct the full cost in the year you purchase.

Bigger Retirement Plan Credits

OBBBA offers increased tax credits to small employers who start retirement plans like SIMPLE IRAs or 401(k)s — including additional credits when you make employer contributions.

This can help you:

  • Reduce your tax bill

  • Attract and retain talent

  • Build your own retirement faster

Updates to the Qualified Business Income (QBI) Deduction

The 20% QBI deduction is still in place, but OBBBA adjusts the rules for certain industries (like consulting, healthcare, law, and accounting). If you’re close to income thresholds or are in a specified service trade or business, you’ll want to double-check your eligibility.

Additional Highlights:

  • Expanded tax credits for apprenticeships and hiring

  • Enhanced research and development (R&D) incentives

  • SALT deduction cap remains in place

What Should Small Business Owners Do Now?

✅ Book a tax planning meeting — don’t wait until year-end
✅ Review your estimated taxes and adjust based on the new rules
✅ Reevaluate your business structure, payroll, and deductions
✅ Plan major purchases while new depreciation rules are favorable
✅ Ask us about retirement plan options for your team

We're Here to Help You Navigate These Changes

At Dishion & Associates, we help business owners like you make sense of tax law changes so you can stay compliant, stay ahead, and keep more of what you earn.

📆 Schedule your tax strategy session today to make sure you're positioned for success under the new rules.

Phillip Dishion
Next