7 New Trump Tax Laws in 2025 for Small Business Owners (OBBBA Explained)

Big news for small business owners! 🚨 In this video, we break down the 7 new tax laws introduced in the One Big Beautiful Bill Act (OBBBA) of 2025, signed into law by President Trump. These new provisions are designed to help small business owners save money, reduce taxable income, and maximize deductions.

If you’re a business owner, entrepreneur, or self-employed professional, you need to understand these changes to stay compliant and take advantage of new opportunities for tax savings.

✅ What You’ll Learn in This Video:

• The 7 new tax laws in 2025 every small business owner should know.
• How the OBBBA of 2025 impacts your small business taxes
• Practical examples of how these laws can lower your tax bill.
• Key differences between the old tax rules and the new 2025 tax provisions.
• Strategies to maximize deductions and protect your business income.

💡 Why This Matters:

Tax laws are constantly changing, and the OBBBA of 2025 brings some of the biggest updates in years. By learning how these changes affect you, your business can stay ahead, save money, and avoid costly mistakes.

📚 Related Topics Covered:

• 2025 small business tax breaks
• Trump’s OBBBA 2025 tax reforms explained
• Tax planning strategies for entrepreneurs
• New IRS rules for small businesses in 2025
• Business deductions and credits under OBBBA

🔔 Don’t Miss Out:

👉 Subscribe to our channel for more updates on tax planning, small business strategies, and financial tips.

👉 Like this video if you found it helpful and share it with other business owners.

📞 Need Professional Tax Help?

We specialize in helping small business owners navigate tax law changes. Contact us today to see how these new tax laws can benefit your business.

☎️ CONTACT US

Phone: 407-344-1012

Email: [email protected]

😃 FOLLOW US ON SOCIAL MEDIA

• Facebook: / freedomgroupfl  
• Instagram: / freedomgroupfl
• LinkedIn: / freedomgroupfl

🔗 OUR WEBSITES

Explore our range of services tailored to meet your needs:

• Freedom Group – https://freedomgroupfl.com/
• Freedomtax Accounting – https://freedomtaxaccounting.com/
• Freedom Insurance – https://freedominsurancefinancial.com/
• Freedom Immigration – https://freedomimmigrationusa.com/

⚠️ DISCLAIMER

This video is intended for education purposes and should not be taken as legal, financial or tax advice.  You should consult with a professional about your unique situation before acting on anything discussed in these videos.  Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. are providing educational content to help small business owners and individuals become more aware of certain issues and topics, but it cannot give blanket advice to a broad audience.  Things are always changing, therefore, this channel may not contain the most up-to-date information.  Neither Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. nor its members can be held liable for any use or misuse of this content.

TRANSCRIPTION

Ready to save thousands in 2025? The new Trump-era tax laws for businesses are here. Some offer game-changing breaks, others require caution. Let’s break them all down.

Welcome to the Freedom Group channel. We are three companies serving this community for over 20 years in taxes, accounting, insurance, financial planning, and real estate, offering complete support for both business and personal needs. If you’re new here, please hit like, subscribe, and turn on the notifications so you never miss a money-saving update.

Let’s dive into seven of the new 2025 Trump tax laws for businesses and what they mean for you. There are more, but we’re diving into seven. 

1. Bonus Depreciation. You might be wondering what bonus depreciation is exactly and how is it different from regular depreciation? Well, bonus depreciation is a tax incentive that allows businesses to deduct a large percentage, oftentimes 100%, of the cost of qualified business assets in the year that they’re placed in service rather than depreciating them gradually over several years. This is going to apply to tangible property like equipment, machinery, computers, furniture, certain qualified improvements like HVAC systems or alarm systems in commercial buildings. Some of the key characteristics is that they are available to most business types like LLCs, S-Corps, C-Corps, etc.

They can apply to both new and used property. They help reduce taxable income immediately, boosting cash flow. So what did the OBBBA, or the One Big Beautiful Bill Act, change in 2025? Before 2025, bonus depreciation was phasing out, dropping from 100% to 80%, then 60%, and so on, and it was set to fully expire by 2027 unless it was extended.

But the OBBBA changed everything, and here’s what it did. 

1. It restored bonus depreciation to 100% for qualified property. 
2. It made bonus depreciation permanent.
3. It applied to assets acquired and placed in service after January 19th of 2025.
4. It still applies to both new and used property. 
5. It encourages domestic investment by making capital expenditures more tax efficient.

Now let’s take a look at an example. Let’s say your business buys a $75,000 commercial in June of 2025. Without the bonus depreciation, you’d have to depreciate it over, say, seven years, deducting around $10,700 per year.

With bonus depreciation under the OBBBA, you will deduct a full $75,000 in 2025 right away. That reduces your taxable income for the year, possibly saving you tens of thousands in federal tax.

2. Section 179, Expensing. What is section 179? Well, section 179 is part of the IRS tax code that allows businesses to deduct the full cost of qualifying equipment or software immediately in the year that it’s purchased and placed in service instead of depreciating it over multiple years. It’s similar to bonus depreciation, but with some key differences, and we’ll get to that. Let’s go over some key features of section 179.

It applies to new or used tangible business property. The deduction is limited to taxable income, so you can’t use it to create a loss. There’s an annual cap on how much you can deduct, also has a phase out threshold, meaning if you buy too much equipment, the deduction starts to shrink.

Let’s go over the section 179 limits after the OBBBA in 2025. It’s made some major enhancements, and here is what changed. Let’s look at this chart to make it easier for you to follow along.

Under the item column, we’ll look at the max deduction limit. Before the OBBBA, that limit was $1,220,000. After the new law, after OBBBA, now the limit is $1,500,000.

The phase out threshold in 2024 before the new law was $3,050,000. And after the new law, now it’s $3,500,000. Eligible real property types.

Limited improvements were included before the OBBBA. In 2025, after OBBBA, it is expanded to more leasehold and retail property. Income limitation rule.

In 2024, it’s still applied. 2025, it still applies. Can’t deduct more than your net business income.

So now in 2025, you can deduct up to $1,500,000 of qualifying property purchases under section 179, as long as your total equipment purchases stay under $3,500,000. Once your equipment purchases exceed that threshold, your deduction starts to phase out dollar for dollar. So let’s look at an example.

Let’s say your business buys a million dollars in office equipment, $400,000 in business use vehicles, and $150,000 in retail space improvements. Because your total purchases equal $1,500,000, and that is under the $3,500,000 threshold, and your business has enough taxable income, you can deduct all $1,500,000 right away under section 179, if that would benefit you. So let’s take a look at another table where we can compare section 179 to bonus depreciation, since they’re very similar.

You can see on the feature column, the limit on the deduction. Yes, there’s a limit under section 179. It’s $1,500,000 now in 2025.

Under bonus depreciation, there is no dollar limit. Can I create a loss with it in section 179? No, it’s limited to the income. Bonus depreciation can generate a loss.

Do you have to elect to use it? Section 179, yes, you must elect it. No for bonus depreciation because it is automatic. Available for used assets? In both cases, yes.

Real property allowed? For section 179, some. It’s expanded under the OBBA. And for bonus depreciation, mostly personal property only.

So in summary, what did the OBBA do for section 179 in 2025? It increased the maximum deduction to $1,500,000. It increased the phase-out limit to $3,500,000. It expanded eligible real property, especially for leasehold, restaurants, and retail improvements.

And it kept the income limitation rule in place. These changes mean that small and medium-sized businesses can now write off even more of their investments up front, which is especially helpful for storefronts and service-based businesses with physical locations. 

3. Qualified business income deduction, the QBID, also known as section 199A deduction.

Quick recap, the QBID lets owners of pass-through businesses deduct up to 20% of their qualified business income or QBI on their personal tax return. This applies to sole proprietors, partnerships, LLCs that are taxed as partnerships or LLCs with sole members, S corporations, but it does not apply to C corporations. For example, if your LLC earned $100,000 in qualified business income, you might be able to deduct $20,000, reducing the taxable portion of that income to $80,000.

What did the OBBA do to the QBI in 2025? Well, it was originally supposed to expire at the end of 2025, which meant big uncertainty for small businesses, but the OBBA made major changes. Let’s look at this chart. It’s going to show the features.

Eligibility threshold. Before the OBBA, the full deduction had to be below $364,000 if married filing jointly. After the OBBA, it’s still allowed, but there are new limits added.

Business size limitation. In 2024 and prior, there was no hard cutoff. With the new law, limited to businesses with $5 million in gross receipts.

That’s before expenses. Phase-out for SSTBs, which are service businesses. In 2024, it was phased out above the income threshold.

In 2025, there is a stricter phase-out, which begins at $400,000 of personal income. Anti-abuse rules. Before 2024 or 2025, they were in place specifically regarding reasonable compensation.

After the new rule, after the OBBA, it has been strengthened to prevent income from splitting. 

Here are the key takeaways from the OBBA changes. 

1. The deduction is now permanent. The sun will not set on the QBID in 2025. If you qualify, the QBID is here to stay.
2. There’s a new cap based on business size. To claim the full 20% deduction, your business must now have less than $5 million in gross receipts, not just profit. This new cap prevents very large passages from claiming the deduction. 
3. Tighter limits on high-earning SSTBs. If you’re in a specified service, trade, or business, like law, medicine, accounting, consulting, et cetera, and your personal taxable income exceeds $400,000, your QBID will phase out completely. Previously, the phase-out range was a little higher, up to $464,000 for a married filing joint in 2024, and it was more gradual.
4. Stronger anti-abuse rules. The IRS is tightening rules around reasonable compensation for S-Corps, and this is to prevent underpaying salaries and overusing the QBID, and also splitting businesses to stay under the income cap. This is called the crack and pack strategy. These rules are designed to make it harder to artificially qualify for the deduction through tax planning gimmicks.

So let’s say you’re a self-employed consultant earning $200,000 from your LLC. Your business has $300,000 in gross receipts. That means you’re under the $5 million cap, and you’re under the $400,000 income limit.

You’ll likely qualify for the full 20% deduction, saving up to $40,000 from your taxable income. But if your income were to be $450,000, and you’re in a service field, your QBID might phase out completely. 

4. Research and development expenses. These are also known as R&D expenses, and these are costs for businesses when they are developing or improving products, processes, software, formulas, or prototypes. Typical expenses in these industries tend to include employee wages for research and development staff, supplies used in research and development, contract research, cloud computing costs related to development, software engineering, and product testing. So what was the rule before the OBBBA? Before 2022, businesses could immediately deduct their R&D expenses in full the year that they were incurred.

This is called immediate expensing. But starting in 2022 under the Tax Cuts and Jobs Act, businesses were required to capitalize and amortize R&D expenses over five years for domestic R&D, and 15 years for foreign R&D. The problem with that is that this dramatically reduced the tax benefits of the R&D spending and increased taxable income, especially hurting small and medium-sized businesses.

Why do these changes matter? Well, because it will create major cash flow boosts for innovators. You will get a full deduction upfront for R&D spending, reducing your taxable income and freeing up more capital to invest, and that’s a very attractive benefit. It should encourage domestic research and development.

This change is designed to promote innovation and keep tech and manufacturing investment in the United States. And it will help startups and small businesses, which typically rely on big R&D expenditures. Now they don’t have to wait years to wait for those tax deductions.

They can benefit from it right away. And let’s show an example here. Let’s say that your startup spends $300,000 on qualifying research in 2025.

Before the OBBBA under the Tax Cuts and Jobs Act, you could only deduct about $60,000 per year, which is about a fifth of your expense because it was depreciated over five years. After the OBBBA, you can deduct the full $300,000 immediately, reducing your taxable income right away. And that could mean tens of thousands of tax savings year one.

5. Opportunity Zones. How did the OBBBA change the rules? Well, the program got extended. The Opportunity Zone program is extended through 2035, giving investors 10 more years to participate.

Step-up in basis was restored. Tax breaks for long-term holding are back. 10% gain exclusion for holding five years, 15% gain exclusion for holding seven years, and 100% tax-free growth if it’s held 10 years or more.

So let’s take a look at another example. Let’s say you made $100,000 from a capital gain in 2025 and reinvested it into a Qualified Opportunity Fund. If you hold it for five years, you only owe taxes on $90,000 of the $100,000 original gain.

If you hold it for seven years, you only owe taxes on $85,000. If you hold the investment for 10 years, the growth of that investment is completely tax-free. These step-up benefits had expired by 2021-2022 under the Original Tax Cuts and Jobs Act, but the OBBBA revised them to encourage new investments.

Gain deferral deadline extended, so capital gains reinvested into a Qualified Opportunity Fund can now be deferred until December 31st of 2030 instead of 2026. There’s also stronger oversight. New compliance rules for Qualified Opportunity Funds improve transparency and require impact reporting.

Another example. Say you sell a property in 2025. You reinvest the gain into a Qualified Opportunity Fund.

You defer the taxes until 2030. Hold 10 years. Pay zero tax on future gains.

This makes Opportunity Zones a powerful and tax-efficient tool, again, for long-term investors, especially in real estate.

6. Third-party network transaction reporting. What is that? Under the U.S. tax law, payment platforms like PayPal, Venmo, Stripe, or certain online marketplaces must issue Form 1099-K to any payee when their gross payments exceed $20,000 in a calendar year and the number of transactions exceeds 200 in the same year.

This rule applied from 2011 until 2021 under Section 6050-W. What changed under the American Rescue Plan Act? If you remember, the ARPA eliminated the transaction threshold and lowered the reporting requirement to a flat $600, effective starting in 2023, and everyone freaked out. It applied regardless of how many transactions occurred.

This created a flood of 1099-Ks. Everybody was coming in with a bunch of 1099-Ks for many gig workers and small sellers. Even for people who sold small personal sales through Cash App or Zillow, they were getting 1099-Ks.

So what did the OBBBA do? It reversed those changes and restored the original thresholds. Payment platforms only need to issue a 1099-K if both gross payments to a payee exceed $20,000 in that year and the total transactions exceed 200. This change is retroactive to 2022, effective as if the ARPA change had never happened, which is super convenient.

7. Form 1099 reporting thresholds. This includes Form 1099-NECs for non-employee compensation and 1099-MIS income. Before the OBBBA, the reporting threshold was fixed at $600 per year.

If you paid somebody more than $600 in a year, you had to file 1099. But the OBBBA raises the threshold to $2,000 starting in 2026 and ties future thresholds to annual inflation adjustments from 2027 onward. So did you get them all? Bonus depreciation, Section 179 Expensing, QBI Deduction, Research and Development Expenses, Opportunity Zones, Third-Party Network Transaction Reporting Threshold, and Form 1099 Reporting Thresholds.

Do you still have questions? Talk to a tax pro. Freedom Group offers full-service tax, accounting, insurance, financial planning, and real estate services so you get tailored help under one roof. Click below to schedule your consultation now.

Thank you so much for watching. If this video helped you, please smash that like button, hit subscribe, and turn on that bell for alerts on future updates. For more help choosing the best business structure to minimize taxes in 2025, watch this next video up there.

Just tap on the screen suggestion and we’ll see you there.

Summary

The One Big Beautiful Bill Act (OBBBA) introduces seven transformative tax changes for 2025 that could save small businesses thousands in federal taxes. Tax expert Carmen Huertas breaks down these game-changing provisions that every business owner should understand.

Major Tax Benefits Now Available

1. Permanent 100% Bonus Depreciation Businesses can now deduct the full cost of qualifying equipment, machinery, and improvements in the year purchased. A $75,000 commercial vehicle that previously required seven years of $10,700 annual deductions can now be fully written off immediately.
2. Enhanced Section 179 Expensing The maximum deduction increased from $1.22 million to $1.5 million, with the phase-out threshold rising to $3.5 million. Eligible real property expanded to include more leasehold and retail improvements.
3. Permanent Qualified Business Income Deduction (QBID) The 20% pass-through deduction is now permanent but includes new restrictions:

• $5 million gross receipts cap for full benefits
• Service businesses face stricter phase-out starting at $400,000 personal income
• Stronger anti-abuse rules to prevent income splitting schemes

4. Immediate R&D Expense Deduction Research and development costs can be fully deducted in the year incurred, reversing the previous 5-year amortization requirement. A startup spending $300,000 on qualifying research can deduct the entire amount immediately instead of $60,000 annually over five years.

Additional Business-Friendly Changes

5. Extended Opportunity Zones The program extends through 2035 with restored step-up basis benefits: 10% exclusion after five years, 15% after seven years, and 100% tax-free growth after 10 years.
6. Simplified Payment Reporting Third-party payment platforms only issue 1099-Ks when gross payments exceed $20,000 AND transactions exceed 200, eliminating the problematic $600 threshold.
7. Higher 1099 Reporting Thresholds Starting 2026, businesses only need to file 1099s for payments exceeding $2,000, with future inflation adjustments reducing administrative burden.

Strategic Implications

These changes particularly benefit manufacturing, technology, and service businesses with significant equipment or R&D investments. The permanent nature of bonus depreciation and QBID provides long-term planning certainty previously unavailable.

Business owners should immediately evaluate equipment purchases, R&D timing, and business structure optimization to maximize these benefits. The combination of immediate expensing options with permanent pass-through deductions creates unprecedented opportunities for tax-efficient business growth.

Bottom Line: OBBBA represents the most significant pro-business tax legislation in years, offering immediate cash flow improvements and long-term planning advantages for qualifying small and medium-sized businesses.