Business Owners in Dallas Warned of Potential 2025 Tax Adjustments Impacting Profits
Navigating the 2025 Tax Changes: A Guide for Dallas Business Owners
In the ever-evolving landscape of taxation, Dallas business owners are faced with significant changes in 2025 that require careful navigation. Here's a breakdown of the key provisions and strategies to help businesses maximize benefits and minimize liabilities.
Significant 2025 Tax Changes
- Corporate Tax Rate and Immediate Expensing
- The corporate tax rate remains permanently at 21%, a significant reduction from 35%.
- Businesses can fully write off the cost of equipment in the year it was purchased and placed in service. This includes 100% bonus depreciation for qualifying assets placed into service after January 19, 2025.
- Qualified Business Income (QBI) Deduction
- The QBI deduction (Section 199A) is permanently extended, allowing up to 20% of pass-through business income to be tax-free.
- The phase-in thresholds for this deduction are increased, potentially allowing more individuals to qualify.
- Research & Development (R&D) Expenses
- Since 2022, R&D expenses must be capitalized and amortized over five years, but small businesses can immediately deduct qualified R&D expenses in the year incurred.
- Remote Work Deductions
- With the rise of remote work, businesses can claim deductions for home office expenses, internet costs, and equipment purchases, but these must be properly documented.
- Employer Credits
- The employer credit for paid family and medical leave is made permanent.
- The credit for employer-provided child care is expanded starting in 2026.
Strategies for Effective Navigation
- Engage a Tax Professional
- Consult a tax advisor to ensure compliance with all new regulations and to optimize deductions.
- Structuring Business Operations
- Consider strategic restructuring of compensation and investing in equipment to stay within safe harbor limits for the QBI deduction.
- R&D Expense Management
- Identify opportunities to classify activities as maintenance or improvement to preserve immediate deductibility for operational expenses.
- Remote Work Compliance
- Implement robust documentation systems for remote work expenses to ensure eligibility for deductions.
- Utilize Employer Credits
- Take advantage of the expanded credits for family leave and child care to reduce tax liabilities.
Beyond these changes, Dallas businesses can benefit from working with a CPA who understands local taxes. Small and mid-sized businesses in Dallas can now be exempt from business personal property tax if the value of their tangible personal property is less than $25,000. However, businesses must still file a Public Information Report or an Ownership Information Report with the state.
The no-tax-due threshold for the Texas franchise tax has increased to $2.47 million in gross revenue for 2025. Circuit Breaker on Appraisals for commercial properties valued under $5 million now caps yearly appraisal increases. Texas's sales tax law now imposes sales tax on a wider array of digital products and services, including e-books, streaming services, software-as-a-service (SaaS), and items sold on third-party platforms like Amazon, Etsy, or eBay.
To stay compliant, businesses should review their filing obligations, invest in tax-compliant bookkeeping and automation tools, reassess employee classifications and payroll setup, factor in bonus depreciation when planning capital investments, consider restructuring if not maximizing the QBI deduction, and stay informed about tax code changes.
- In the landmark 2025 tax changes, small-business owners, like Dallas entrepreneurs, can advantageously adapt their corporate structure to stay within safe harbor limits for the Qualified Business Income (QBI) deduction, thereby maximizing their tax-free business income.
- By utilizing the extended QBI deduction, small businesses can strategically structure their compensation and invest in qualifying equipment to substantially decrease their tax liabilities in 2025.
