5 Tax Tips Every Small Business Owner Should Know in 2025.

Here are 5 Tax Tips Every Small Business Owner Should Know in 2025:

1. Leverage the Section 179 Deduction

• Take advantage of the Section 179 deduction to write off the cost of qualifying equipment and software purchased for your business. For 2025, ensure you're aware of any updated limits and rules to maximize your savings.

2. Track All Tax-Deductible Expenses

• Keep detailed records of expenses like office supplies, rent, utilities, business meals, travel, and employee benefits. Use accounting software or a professional bookkeeper to ensure no deductions are missed.

3. Understand Qualified Business Income (QBI) Deduction

• If your business is a sole proprietorship, partnership, or S corporation, you may qualify for the 20% QBI deduction. Ensure your income level and business type meet the criteria and consult a tax professional for strategic planning.

4. Stay on Top of Estimated Taxes

• Avoid penalties by paying quarterly estimated taxes. Use your prior year's tax liability or consult your CPA to calculate the correct amounts, especially if your income fluctuates.

5. Invest in Retirement Plans for Tax Benefits

• Set up retirement plans like a SEP IRA, Solo 401(k), or SIMPLE IRA. Contributions are often tax-deductible and help you save for the future while reducing your taxable income.