President Trump signed sweeping tax legislation into law on July 4th, and the changes affect your business immediately. If you’re a contractor, retailer, or any business owner with significant equipment needs or inventory, these changes create both opportunities and compliance requirements that demand immediate attention.
The biggest immediate impact for trades contractors and inventory-heavy businesses is the return of 100% bonus depreciation. This means you can now deduct the full cost of qualifying equipment purchases in the year you buy them, rather than spreading the deduction over several years.
For contractors, this covers everything from trucks and trailers to specialized tools and machinery. For retailers and distributors, this includes warehouse equipment, point-of-sale systems, and material handling equipment. If you’ve been delaying equipment purchases, now is the time to act. The difference between the previous 40% deduction and the new 100% deduction can save thousands in taxes for a single major purchase.
The 20% pass-through deduction is now permanent, providing long-term certainty for your tax planning. Whether you operate as an LLC, S-Corp, or partnership, this deduction can significantly reduce your tax burden. Combined with the permanent nature of lower individual tax rates, many business owners will see substantial tax savings compared to what they would have faced if the previous tax law had expired.
If your business pays tips or overtime, you need to understand new compliance requirements immediately. The legislation allows employees to deduct tip and overtime income, but this creates new reporting obligations for employers. You’ll need to track and report these amounts on W-2s, requiring updates to your payroll systems and processes.
This affects restaurants, service businesses, and contractors who regularly pay overtime. While the deduction benefits your employees, the compliance burden falls on you as the employer. Getting ahead of these requirements now will save headaches during tax season.
The state and local tax deduction cap increases to $40,000 through 2029, which can benefit business owners who itemize deductions. This is particularly valuable for contractors, business owners, and small business accountants in high-tax states who own both their business and personal property.
These changes didn’t wait for January 1st—they’re effective now. This creates a unique mid-year planning opportunity to maximize your tax savings for 2025. Equipment purchases made today can generate immediate deductions, and strategic planning can help you take advantage of multiple new provisions simultaneously.
For inventory-heavy businesses, this might mean accelerating planned equipment purchases or upgrading systems before year-end. For contractors, it could mean investing in that new truck or specialized equipment you’ve been considering. The key is timing these decisions strategically to maximize your tax benefits.
The complexity of these changes, combined with limited IRS guidance on implementation, means you can’t afford to wait. Businesses that act quickly to understand and implement these changes will have a significant advantage over those who delay.
The permanent nature of most provisions means your long-term business planning can now incorporate these tax benefits with confidence. However, some provisions like the enhanced SALT deduction are temporary, making immediate action even more critical.
These tax changes create immediate opportunities, but they also require prompt action to maximize benefits and ensure compliance. Don’t let these significant savings opportunities pass you by or find yourself scrambling to meet new compliance requirements.
Ready to make these tax changes work for your business? Contact our office today to schedule a mid-year tax planning consultation. We’ll review your specific situation, identify immediate opportunities, and develop a strategy to maximize your tax savings while ensuring full compliance with the new requirements.
Call us at 207-800-3198 or email grow@cultivateconsulting.co to schedule your consultation. The sooner we start, the more we can save.
Christine Gervais
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
