Big Picture Tax Planning for Small Businesses in 2025

Valerie C.
3 days ago
6 min read

How LLCs, Partnerships, Sole Proprietors & Schedule C Filers Can Benefit — and Why Having a Trusted Accountant Matters

If you’re a small-business owner — whether you operate as a sole proprietor, a partnership, or an LLC taxed as a pass-through entity — 2025 brings some significant tax-planning opportunities. At Services by Valeria, we specialise in concierge accounting services for small businesses (especially in construction), so you can focus on what you do best — and we take care of the rest.

Here’s what you need to know.

Who this applies to

You’re operating as a sole proprietor (Schedule C) in your own name.
You’ve formed an LLC (either “single-member” or multi-member) that is taxed as a pass-through entity.
You’re in a partnership (including multi-member LLC taxed as a partnership).
You may also be filing as an S corporation’s shareholder (similar planning applies in many ways).

Because these entity types flow business income through to your personal return, many of the small-business tax rules discussed below apply directly.

Key tax-law changes for 2025 that you should know

Here are some of the most important changes for 2025 — always work with an accountant to apply them to your facts.

1. The Qualified Business Income (QBI) Deduction is now permanent

One of the most valuable deductions for pass-through businesses (sole proprietorships, partnerships, LLCs, S-corps) is the deduction under Section 199A (commonly called the QBI deduction). This lets eligible business owners deduct up to 20% of their qualified business income.

For 2025:

The deduction remains in effect and is now made permanent.
There are thresholds and limitations if you’re in a “specified service trade or business” or your taxable income is high.
The key takeaway: For many small businesses, this remains a powerful tool to reduce taxable income.

2. Expanded first-year expensing under Section 179 & bonus depreciation

If you purchase equipment, software, or other qualifying property for your business, you may be able to deduct the full cost in the year it’s placed in service rather than depreciating over many years.

Section 179 limits have been significantly increased for 2025. For example academic commentary notes the maximum deduction could be around $2.5 million with phase-out thresholds around $4 million for eligible property.
Bonus depreciation for qualified property (in many cases) is back at or near 100%.
For small business owners this means: if you’re investing in new tools, machinery, software, vehicles (if eligible) or other tangible property, doing so in 2025 may maximise tax-savings.

3. Standard deduction increases & itemizing decisions

For 2025, standard deduction amounts have been increased, which means deciding whether to take the standard deduction vs. itemize may tip one way or the other.

If you’re a small business owner with lots of deductions (e.g., home office, vehicles, equipment, etc.), you’ll want to evaluate carefully whether itemizing makes sense.

4. Other notable deductions / business-expense opportunities

Ordinary business-expense deductions: things like office supplies, marketing/advertising, business meals (subject to rules), health-insurance premiums (for self-employed), etc.
Particularly for construction or small-business operations: purchases of tools, equipment, vehicles, rental of tools/space, home-office if applicable, subcontractor payments, etc.
Proper structuring and documentation really matter to ensure deductions stand up under audit.

How small construction-business owners & other service-based businesses can benefit

If you run a small construction business (or a service-based business) your tax planning needs some special attention:

Equipment, machinery, vehicles: If you’re investing in new equipment (trucks, tools, heavy machinery, technology) you may qualify under Section 179/bonus depreciation — taking advantage sooner rather than later can be wise.
Pass-through entity structure: Many construction businesses operate as LLCs or partnerships. That means the QBI deduction, entity-structure optimization, and expense tracking all matter.
Subcontractors & 1099s: If you pay subcontractors, ensure you comply with 1099-NEC/1099-MISC rules, track contractor payments, and classify properly.
Home-office / storage space / equipment staging: If you have space dedicated for business operations (tools storage, staging area, administrative office) you may have additional deductible expenses (utilities, rent, insurance portion) subject to rules.
Deduction timing & forecasting: If you anticipate a busy year, planning major purchases or expenses now may capture tax deductions in 2025. For example, buying equipment late in the year or pre-paying certain expenses might benefit your tax position.
Proper bookkeeping: Construction businesses often have complex cost structures (materials, labour, subcontractors, equipment rentals). Having clean, well-documented records is critical for maximizing deductions and minimizing risk.

Why having a dedicated accountant (and concierge service) matters

At Services by Valeria, we offer more than basic bookkeeping — we provide a concierge service tailored for small business owners (especially in construction) so that you can concentrate on what’s truly important — your success. Because, after all: your success is our success.

Here’s how we help:

Proactive tax-planning: We don’t just file your numbers — we plan ahead. We review your projected income, assess whether it’s better to accelerate purchases/expenses, evaluate your entity structure (LLC vs. partnership vs. sole proprietorship) and help you make strategic decisions.
Full service bookkeeping + compliance: From tracking receipts and expenses, to managing subcontractor payments, vehicle logs, equipment purchases, and ensuring that documentation is audit-ready.
Specialty in small construction business: We understand the nuances of construction — equipment, vehicles, tools, staging, subcontractors, materials — and how tax rules apply specifically in that context.
Tax filing + advisory: We handle the tax return preparation (federal, and where applicable state/local), but we also provide advisory so that you’re not surprised at tax time.
You focus on business growth: When you delegate the accounting and tax-planning to us, you free up time and mental bandwidth to build your business, manage jobs, nurture client relationships, and deploy capital where it counts.

What you should do right now (2025 action steps)

To make the most of 2025 tax opportunities, here are immediate steps to consider:

Meet with your accountant ASAP – Let’s review your 2025 projected income, expenses, equipment purchases, and entity structure.
Evaluate major purchases – If you’re planning to invest in equipment, technology, vehicles or other business property, consider doing so in 2025 to capture deductions under Section 179/bonus depreciation.
Track all expenses carefully – Especially contractors, subcontractors, vehicle use, home-office (if applicable), marketing, tools, rental of equipment. Proper documentation matters.
Review your business structure – If you’re operating as a sole proprietor, an LLC, or a partnership, confirm whether your entity classification is optimal for tax purposes and flexibility.
Decide standard deduction vs. itemizing – With increased standard deduction amounts, evaluate whether your business and personal deductions warrant itemizing.
Prepay or accelerate costs when helpful – If your cash flow allows and it makes sense, prepay certain expenses (subscriptions, insurance, supplies, etc.) to capture the deduction in 2025.
Maintain clean bookkeeping and records – Especially for construction businesses: separate business vs. personal expenses, maintain mileage logs (if using vehicles for business), keep equipment purchase invoices, subcontractor payment records, etc.
Plan for growth – Use tax-savings from these deductions to reinvest in your business: upgrade tools, hire, expand operations. At the end of the day, tax savings are a means to fuel growth.

Important caveats & reminders

Tax laws change and each business’s facts are different — state tax rules may differ from federal rules.
Some deductions and rules have thresholds, phase-outs, or income-limitations (for example, the QBI deduction has limits when income is high or you’re in a specified service business).
Documentation is critical. Even the best deduction is at risk without proper records.
Timing matters. For example, when you place property in service, when you pay expenses, when you incur liabilities — these all can influence which tax year the deduction applies.
Avoid last-minute surprises — proactive planning is far better.
Consultation with your tax professional is essential — what we provide through Services by Valeria is tailored, full-service accounting + advisory — not a generic “do-it-yourself” solution.

Why it matters for you

Lower taxes = more cash you can deploy for growth, hiring, equipment, marketing, and other strategic investments.
The tax environment in 2025 is especially favourable for small business owners who act now (equipment purchases, deduction timing, entity structure) — you don’t want to leave money on the table.
With the right accountant/concierge service in your corner, you reduce risk, free up your time, and focus on building your business.
For small construction businesses, the extra complexity (tools, equipment, vehicles, materials, subcontractors) means you especially benefit from specialised support.

Final word

If you’re a small business, sole proprietor, LLC owner, or partner in a small construction business — 2025 is a year to take advantage. At Services by Valeria, we’re here to be your partner: handling the accounting, planning the tax strategy, and giving you the freedom to focus on what you do best. Because your success is genuinely our success.

Contact us today to schedule your business-tax planning session for 2025. Let’s make sure you fully leverage the opportunities ahead.