The 2025 Tax Law Overhaul: What It Means for You and Your Business
By Sam Dodin, CEO, Excel Tax Group
The 2025 tax landscape has been fundamentally reshaped. With the passage of the One Big Beautiful Bill (OBBB) in July 2025, many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) have been made permanent, and new reforms have been introduced. For small business owners and high-income individuals, these changes represent both significant opportunities and potential risks.
Understanding what changed is important. But knowing how to strategically respond is what distinguishes proactive planning from costly reaction.
Key Changes You Should Be Aware Of
Individual Tax Rates Permanently Extended
The reduced TCJA-era individual income tax rates, including the top 37% bracket, have been made permanent. This offers planning certainty, especially around compensation, income recognition, and estate strategies.
Section 199A Pass-Through Deduction Preserved
The 20% Qualified Business Income (QBI) deduction remains in place for eligible pass-through businesses. Business owners should review their entity structure and income thresholds to ensure they continue to benefit.
New Deductions Introduced
New deductions have been enacted for tips, overtime pay, and automobile loan interest. These changes create new planning considerations for payroll design and employee benefit strategies.
100% Bonus Depreciation Reinstated
Businesses can now fully expense qualified property placed in service through 2028. This provision supports capital investment but must be coordinated with cash flow and long-term tax planning.
Full Expensing of R&D Costs Restored
The requirement to amortize research and development expenses over multiple years has been repealed. Immediate expensing is once again allowed, and the R&D credit remains in place with expanded eligibility for small businesses.
Increased SALT Deduction Cap
The state and local tax deduction cap has been raised to $40,000 for individuals with income under $500,000. Above this level, phaseouts apply. Taxpayers in high-tax states should review how this impacts itemized deductions.
Enhanced Child Tax Credit
The Child Tax Credit has increased to $2,200 per child. While typically viewed as a personal tax matter, it may affect planning for owners of pass-through businesses where income thresholds are relevant.
New “Trump Accounts”
A new tax-advantaged savings vehicle has been introduced, providing deferral opportunities. The rules are complex and should be evaluated within the broader context of retirement and liquidity planning.
What This Means for You
These changes create a more stable tax environment in many respects, but they also introduce new complexity. Business owners and high-income individuals should consider:
- Whether their current structure aligns with the updated code
- How to time income, expenses, or capital investments for optimal tax efficiency
- What new deductions or incentives may apply based on their industry or compensation model
At Excel Tax Group, we provide forward-thinking, personalized tax strategy tailored to the real-world needs of business owners. Our work goes beyond compliance—we focus on aligning tax planning with your broader financial and business goals.
Thoughtful planning now can protect and grow your wealth for years to come.
Schedule a Strategy Session
If you are looking for expert guidance to navigate the 2025 tax changes, our team is here to help. Reach out to schedule a strategy session.
Contact Us
Excel Tax Group
130 Vantis, Suite 145, Aliso Viejo, CA 92656
☎ (949) 298-2908
✉ info@excel-tax.com
🌐 www.excel-tax.com