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TAX PROVISION
Excess Business Loss Limitation
WHAT CHANGED
Limit on excess losses over $313,000 (single)/ $626,000 (married) was made permanent. Thresholds to be adjusted annually for inflation. Excess losses become Net Operating Losses (NOLs) and can be carried forward to offset future income.
Qualified Business Income (QBI) Deduction
20% deduction for pass-through income is now permanent. Phase-In thresholds increased from $50,000 to $75,000 (single) and from $100,000 to $150,000 (MFJ)
Section 179
Limit increased to $2.5M; Phase-out starts at $4M
100% Bonus Depreciation
100% first-year write-off made permanent for qualified property placed in service after Jan. 19, 2025
C Corporation Tax Rate
Flat 21% tax rate is now permanent
Domestic Research & Experimental Expenses
Full write-off allowed starting 2025. Small businesses may be eligible to retroactively apply these rules back to 2022.
Business Interest Expense Limitation
Reverted to the EBITDA rule - Limited to 30% of Earnings before interest, taxes, depreciation and amortization
Farmland Capital Gains
Sellers of qualified farmland to another actively engaged farmer can now elect to spread capital gains tax payments over 4 years
2025 BUSINESS TAX UPDATES
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