Tax laws never stay still for long, and 2025 is no exception. While some updates may seem minor, even small adjustments can change how your business files, reports, and plans financially. The earlier you understand these changes, the easier it is to adapt—and avoid costly mistakes. Here are the 5 changes in tax law that could affect your business this year and what they mean for you.
1. Higher Thresholds for 1099-K Reporting
If your business uses third-party payment platforms like PayPal, Stripe, or Square, take note: The reporting threshold for 1099-K forms has changed again. While last year brought a temporary delay in stricter reporting, new rules this year lower the threshold to $5,000 in total transactions for many states. This means more businesses—and even side hustles—will receive a 1099-K and must report those earnings.
2. Adjusted Depreciation Rules for Certain Assets
New tax law adjustments have slightly modified how certain property and equipment can be depreciated. Businesses that purchase machinery, vehicles, or technology may now have different timelines for claiming deductions. Understanding these changes could help you plan purchases more strategically and take advantage of accelerated depreciation when possible.
3. Updated Employee Retention Credit Guidance
The IRS has issued new clarification on claims related to the Employee Retention Credit (ERC), including stricter documentation requirements. If you claimed the ERC in past years or are considering amending returns, you’ll need to ensure your records meet the updated standards to avoid repayment demands or penalties.
4. Revised Rules for Business Meal Deductions
The temporary 100% deduction for business meals has expired, and most meals are now back to being 50% deductible. This change impacts businesses that frequently entertain clients or conduct working lunches. Keeping accurate receipts and clear notes on the business purpose of each meal will remain important for compliance.
5. State-Level Corporate Tax Adjustments
Several states have adjusted their corporate tax rates or updated apportionment rules for businesses operating across state lines. If you do business in multiple states, these changes could alter how much tax you owe in each location. Reviewing your state filings now can help you avoid surprise bills later.
Why These Changes Matter for Your Business
Ignoring these updates can lead to compliance issues, missed deductions, and even audits. Staying ahead of the 5 changes in tax law that could affect your business this year allows you to make informed decisions—whether that’s timing purchases differently, improving recordkeeping, or adjusting your payroll and bookkeeping practices.
