At Athlone Partners, we've been closely monitoring the economic landscape to bring you these latest insights to open 2025.

Enhanced Section 179 Deduction -encouraging small and midsize companies to invest in capital.

The Section 179 tax deduction has been increased by $30,000 for 2025. The total deduction is now $1.25 million.

This allows all companies to purchase or finance eligible new and used business equipment, and deduct 100 percent of the purchase price from their taxable income, up to a combined total of $1.25 million for the calendar year.

So small businesses can use this significant boost as they invest in new technology.

The total spending allowance to claim the deduction has been increased to $3.13 million, which means that the total amount a company can spend on eligible equipment during the calendar year— and once a company reaches that number, the $1.25 million deduction begins to decrease on a dollar-for-dollar basis.

Simply use IRS form 4562

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Simplified Home Office Deduction

The Qualified Business Income (QBI) deduction is still in effect for 2025, allowing eligible pass-through businesses to deduct up to 20% of their business income.

If you have a pass-through business (like a sole proprietorship, partnership, or S-corporation), you could be eligible.

As of February 2025, there are discussions about limiting business interest deductions to 10% of earnings before interest, taxes, depreciation, and amortization (EBITDA).

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Research and Development (R&D) tax credit

This is often associated with big tech companies but small businesses can qualify if they’re involved in innovation, even not directly related to high-tech industries.

The credit is based on a percentage of your eligible research expenses, like wages, materials, and contract costs.

Work Opportunity Tax Credit (WOTC)

The Work Opportunity Tax Credit WOTC encourages businesses to hire individuals from certain groups of disadvantaged job seekers, like veterans, ex-felons, or people who have been unemployed for a long time.

If you hire someone from one of these groups, you could qualify for a tax credit of up to $9,600 per person, depending on the specific group they belong to.

As of February 2025, the WOTC is in place until December 2025

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These tax breaks offer significant incentives to US SMBs, but it's crucial to remember that tax legislation can be unpredictable. We're committed to keeping our clients informed and prepared for whatever 2025 may bring.

Remember, effective tax planning is an ongoing process.

Now is the perfect time to review your business structure and financial strategies. By staying proactive, you'll be well-positioned to take advantage of any new tax breaks that may come your way in 2025. Call us if you need help!