Tax Saving Strategies for Small Businesses in 2025

Top Tax Saving Strategies for Small Businesses in 2025

• 1. Maximize Section 179 Deductions

  In 2025, businesses can deduct up to $1.25 million of qualifying equipment or software under Section 179. From office computers to company vehicles, this deduction boosts cash flow while upgrading operations.

• 2. Utilize Bonus Depreciation

  Deduct 60% of eligible asset costs in 2025 (down from 80% in 2024). Ideal for capital-heavy investments like machinery or business vehicles. Read the full guide here.

• 3. Hire and Save with the WOTC

  Hiring employees from target groups (e.g. veterans, long-term unemployed) can earn you $2,400–$9,600 per hire in federal tax credits.

• 4. Start or Contribute to a Retirement Plan

  SEP IRA or Solo 401(k) contributions are tax deductible and help secure your future. Contribution limits reach up to $69,000 in 2025.

• 5. Claim the QBI Deduction

  Pass-through entities like LLCs and S-Corps can deduct up to 20% of net qualified income—a major benefit for service-based businesses and freelancers.

• 6. Deduct Your Home Office & Utilities

  If you work from a dedicated home office, deduct a portion of rent, utilities, and internet. In 2025, deductions now include smart-home devices used for work.

• 7. Leverage HRA & HSA Accounts

  Offering HRAs or HSAs allows you to deduct contributions while helping employees save tax-free—a tax-smart benefit for both sides.

• 8. Prepay Expenses

  Cash-based businesses can prepay for 2026 services (like software, insurance, or maintenance) to deduct the cost now and lower 2025 taxable income.