If you own a business, 2025 is a turning point for your taxes. The One Big Beautiful Bill Act (OBBBA) reshaped deductions and expensing rules in ways that could save small business owners millions—if they plan ahead.
In this guide, we’ll break down the most important provisions and what they mean for small business tax planning in 2025.
100% Bonus Depreciation Is Permanent
For years, bonus depreciation was being phased out—80% in 2023, 60% in 2024, and set to fall to 40% in 2025. OBBBA reversed that trend.
Beginning January 20, 2025, small businesses can deduct 100% of qualifying property immediately.
Eligible property includes machinery, equipment, computers, furniture, off-the-shelf software, and land improvements (fences, driveways, landscaping).
Commercial real estate owners can supercharge savings with cost segregation, deducting 20–30% of a property’s value in year one
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Why this matters for small business tax planning 2025: Major purchases no longer have to be depreciated slowly over time. The cash flow benefit of immediate write-offs can fuel growth and reinvestment.
Section 179 Expensing More Than Doubles
Section 179 has long been a favorite for small businesses because it allows flexibility in which assets you deduct. Under OBBBA:
The annual deduction cap jumps to $2.5 million (from $1.22 million in 2024).
The phase-out begins at $4 million and ends at $6.5 million.
Section 179 covers the same types of property as bonus depreciation plus certain building improvements like roofs and HVAC systems.
Key planning point: With permanent 100% bonus depreciation now available, Section 179 will likely be used less. But it still offers strategic advantages—especially if you want to deduct some assets now and spread others out for future tax years.
A New 100% Deduction for Production Property
One of the most significant opportunities for small business tax planning in 2025 is the brand-new deduction for qualified production property (IRC §168(n)).
Applies to nonresidential real estate used directly in manufacturing, refining, or agricultural/chemical production.
Construction must begin between Jan. 20, 2025 – Dec. 31, 2028, and be in service before 2031.
Businesses can deduct 100% of the cost of new qualifying facilities in the year they’re placed in service.
This deduction is temporary, so manufacturers and producers should move quickly to take advantage of it.
What This Means for Small Business Owners
For entrepreneurs and owners, small business tax planning in 2025 is about strategy:
Immediate deductions: Vehicles, equipment, and property improvements can all be written off in full.
Bigger first-year savings: Cost segregation studies can create massive upfront deductions for property owners.
Manufacturing incentive: A once-in-a-generation chance to deduct the full cost of new facilities.
Failing to plan could mean missing deductions that your competitors are already capturing.
How Quartermaster Tax Helps with Small Business Tax Planning 2025
At Quartermaster, we cut through the 70,000-page tax code and show you exactly how to leverage the new rules in your favor. Our team specializes in:
Maximizing bonus depreciation and timing purchases to fit OBBBA rules.
Running cost segregation studies to unlock immediate deductions on real estate.
Structuring Section 179 elections to fit your income strategy.
Guiding manufacturers through the new production property deduction before the window closes.
2025 is the year of proactive planning. Don’t wait until tax season—these savings depend on the decisions you make right now.