What the “Big Beautiful Bill” Means for Business Taxes
The Big Beautiful Bill passed the Senate and is moving forward in the House. It includes several tax changes that will impact businesses of all sizes. Whether you’re self-employed or managing a corporation, here’s what you need to know for 2025 and beyond.
1. Corporate Tax Changes
- C-corporation tax rate increases from 21% to 25%
- Minimum 15% tax on financial statement (book) income for companies with profits over $10 million
2. Depreciation and Equipment Deductions
- Section 179 limit increases to $2 million
- Bonus depreciation returns to 100% through 2027
If you’re planning equipment purchases, now may be a great time to act.
3. Meals and Entertainment Deductions
- Client meals remain 50% deductible
- Entertainment expenses become non-deductible
- Company events stay 100% deductible up to $2,000 per employee
4. R&D and Innovation Credits
- Increased R&D credit for U.S.-based labor
- New “Innovation Workforce Credit” offers 15% credit for STEM apprentice wages
- Immediate expensing returns for software development
5. Pass-Through Entities and QBI
- QBI phase-out raised to $450,000 for married filers
- Optional flat 18% deduction for service businesses earning under $2 million
6. Energy and Vehicle Incentives
- 30% credit for solar, geothermal, or battery storage
- 50% credit for converting fleet vehicles to electric, capped at $40,000 per vehicle
7. Reporting and Compliance
- New digital asset reporting rules for transactions over $5,000
- Mandatory e-filing for businesses with 10+ returns annually
Next Steps for Businesses
- Evaluate entity structure and potential tax exposure
- Schedule high-ticket purchases while depreciation rules are favorable
- Document R&D activity for increased credits
Want a business tax check-in before the year ends? Reach out to the LEAF team, and we’ll help you get ahead of the changes.
