There’s a new tax bill in town. We don’t recommend reading it unless you enjoy footnotes and IRS jargon.
But luckily, we already did.
The 2025 Tax Relief Act brings back a few deductions, locks in some existing tax cuts, and quietly rewrites how certain business expenses work.
If you own a business in Texas, some of these changes might actually save you money. Others might just mean more forms.
Either way, it’s worth knowing what changed, and what you can do about it before year-end.
Here are the cliff notes of the new tax bill for Texas businesses.
Starting January 19, 2025, you can again write off the full cost of qualifying business purchases in the year you make them.
This applies to things like:
If you spend $300,000 on upgrades, you may be able to deduct the full amount that year. Depending on your tax rate, that could mean saving $75,000 or more right away.
You can now expense up to 2.5 million dollars in qualifying purchases under Section 179. The deduction starts to phase out once you hit 4 million dollars in total purchases.
This pairs well with bonus depreciation, especially if you are buying used equipment or making multiple investments across locations.
Previously, you had to spread out your domestic research and development expenses over five years. Not ideal.
Now, starting in 2025, you can deduct the full cost of qualifying R&D expenses in the same year you incur them. This makes the R&D tax credit more valuable and easier to use.
Qualifying activities might include:
If your average annual revenue is under 31 million dollars, you may also be able to amend your 2022 through 2024 returns to capture refunds.
The 20 percent deduction for qualified business income is here to stay. This applies to sole proprietors, S corporations, and partnerships. Income limits and phaseouts still apply, especially for service businesses, but this is a helpful deduction to preserve.
It also reinforces the importance of reviewing your entity structure. Being set up the right way matters more now that these tax rules are locked in long-term.
If you own pass-through entities operating in other states with income taxes, you can still use the pass-through entity tax (PTET) to pay state taxes at the business level. This bypasses the personal 10 thousand dollar SALT cap and allows you to deduct more of those payments.
Texas does not have a state income tax, but many business owners have filings elsewhere. If that is you, this strategy still works.
Starting in 2026, the threshold for issuing a 1099 will increase from 600 dollars to 2,000 dollars. That means fewer forms to file for small one-time vendors and a bit less clutter at year-end.
Even if you focus mostly on your business, many of these changes will affect your personal return too, especially if your business income flows through to you.
The current lower tax brackets from the 2017 tax law will remain in place permanently. That means rates like 10, 12, 22, and 24 percent are not going anywhere. For married filers making under 400,000 dollars, this helps avoid bracket creep.
The higher standard deduction is also made permanent. For 2025, that is 31,500 dollars for married couples filing jointly. It keeps things simple and reduces taxable income without needing to itemize.
In 2025, the deduction cap for state and local taxes jumps from 10,000 dollars to 40,000 dollars. This is a one-year bump and will phase back down gradually. Still, it is worth noting if you own real estate or pay high property taxes in other states.
If you are age 65 or older, there is a new 6,000 dollar deduction available as long as your income is under 150,000 dollars for married filers or 75,000 dollars if single.
From 2025 through 2028, you can deduct up to 10,000 dollars in interest on a car loan, as long as the car was assembled in the United States. This could be relevant if your business uses vehicles and you are considering financing instead of paying cash.
Well, probably don’t go read a 900-page bill. We already did that.
We’ve covered the major changes here – the stuff that actually matters if you’re running a business in Texas. But if you’re wondering how this applies to your specific setup, we should talk.
If you’re planning capital investments, testing new products or systems, or trying to figure out if your income strategy still makes sense, this bill could help you keep more of what you earn.
At Adam Traywick, CPA, we treat this like what it is: a planning opportunity. The kind that doesn’t come around every year.
Book a time with our team if you want to walk through it.
We’ll break it down and help you focus on the parts that actually reduce your tax bill.
Until next time.
