2025 Tax Changes Every Small Business Owner Needs To Know

Small Business Tax Savings Podcast

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Are you making the most of the new 2025 tax changes, or could a simple tax strategy adjustment save you thousands?
In this episode, Mike breaks down key tax changes for 2025 that small business owners need to know. He covers adjustments to tax brackets, increases in the standard deduction, new mileage rates, retirement contribution limits, and updates to gift and estate tax exclusions. He explains how these changes impact tax planning, emphasizing strategies to optimize deductions and avoid unnecessary tax burdens. Additionally, he highlights potential future tax changes with the incoming administration and the importance of staying updated.

[00:00 - 05:21] Understanding the 2025 Tax Brackets

• Tax brackets adjust annually for inflation, ensuring more income is taxed at lower rates.
• Mike explains how tax brackets work and why crossing into a higher bracket doesn’t mean all income is taxed at that rate.
• Knowing your tax bracket can help with strategic tax planning, such as Roth conversions and deductions.

[05:22 - 10:24] Mileage Deduction Increase for 2025

• Mike discusses when to use the mileage method versus actual expenses for vehicle deductions.
• Choosing the right deduction method (mileage vs. actual expenses) depends on vehicle costs and business mileage.

[10:25 - 14:44] Standard Deduction Updates

• The standard deduction increases to $30,000 for married filers and $15,000 for single filers.
• How can this impact taxpayers deciding between itemized and standard deductions?
• Most taxpayers will benefit from the standard deduction, but strategic "bunching" of itemized deductions can provide tax advantages.

[14:45 - 18:53] Retirement Contribution Limits Increase

• Employee 401(k) contribution limit rises to $23,500, while IRA limits remain at $7,000.
• Maximizing retirement contributions helps reduce taxable income and build financial security.

[18:54 - 21:53] Gift & Estate Tax Changes

• The gift tax exclusion increases to $19,000 per recipient.
• Estate tax exemption rises to $13.99 million, affecting wealth transfer planning.
• Strategic gifting can help reduce taxable estates and transfer wealth efficiently.
• Proactive tax planning ensures business owners take advantage of new tax laws while avoiding potential pitfalls.

Quotes:

“Simply going into a new tax bracket doesn’t mean all of your income is taxed at that higher rate.” - Mike Jesowshek, CPA

“More of your income being taxed at a lower rate is good news—it means you’re keeping more of what you earn.” - Mike Jesowshek, CPA

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

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