10 Ways the New Tax Laws Can Help Small Businesses

10 Ways the New Tax Laws Can Help Small Businesses

Tax law changes can feel intimidating, but hidden inside the fine print are powerful opportunities for small businesses to save money, cut taxable income, and reinvest in growth.

Here are 10 ways the latest tax updates can work in your favor right now:

1. Higher Section 179 Deductions

Small businesses can deduct more upfront when buying equipment, vehicles, or technology. Instead of depreciating over years, you lower taxable income in the year of purchase.

💡 Example: A bakery bought new ovens and deducted the full cost this year—freeing up thousands in tax savings.

2. Bonus Depreciation Still Available

Beyond Section 179, bonus depreciation lets you immediately deduct a percentage of big-ticket purchases like machinery or furniture, accelerating your write-offs.

3. Lower Corporate Tax Rates

C-corporations continue to benefit from a 21% flat tax rate, much lower than historical levels. This allows owners to retain more profits and reinvest them back into the business.

4. Bigger Standard Deduction

Owners of sole proprietorships, LLCs, and S-corps benefit from a higher standard deduction, lowering taxable income without the hassle of itemizing.

5. Expanded QBI (Qualified Business Income) Deduction

Pass-through entities may still qualify to deduct up to 20% of qualified business income, significantly reducing tax liability.

💡 Example: A marketing agency earning $150,000 in qualified income saved nearly $30,000 in taxes under this deduction.

6. More Flexible Business Meal Deductions

Business meals remain 50% deductible, helping you reduce taxable income while networking or building client relationships.

💡 Example: A real estate agent who spends $500/month entertaining clients gets $3,000 a year in deductible expenses.

7. Retirement Plan Contributions

Contributions to plans like SEP IRAs, SIMPLE IRAs, or 401(k)s are deductible. This reduces taxable income while helping owners and employees save for the future.

8. Health Insurance Premium Deductions

Self-employed business owners can deduct health insurance premiums for themselves and their families, lowering taxable income significantly.

9. Tax Credits for Hiring Employees

Certain credits, such as the Work Opportunity Tax Credit (WOTC), reward businesses for hiring from targeted groups (veterans, long-term unemployed, etc.).

💡 Example: A restaurant that hired two qualifying employees received over $4,800 in tax credits.

10. Energy Efficiency Incentives

Investments in energy-efficient improvements (like HVAC systems, LED lighting, or solar panels) may qualify for credits or accelerated deductions, lowering both your utility bills and your taxes.

The Bottom Line

The new tax laws aren’t just about compliance—they’re opportunities to keep more of what you earn. By leveraging deductions, credits, and smart planning, small businesses can turn tax season into a profit strategy.

📞 Want a step-by-step plan to maximize your savings under the new tax laws? Let’s talk.