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May 2025: IRS Updates Every Small Business Owner Should Know



We’re officially into May—and while you’re probably juggling spring cleaning, new projects, and keeping your business running smoothly, don’t forget that this month brings a few important IRS updates that could impact your bottom line. Whether you’re a one-person shop or running a small team, here's what you need to know (in plain English).


🌟It’s National Small Business Week (May 4–10)!

First off—Happy National Small Business Week! The IRS is joining in the celebration by rolling out free webinars, tips, and tools for entrepreneurs like you. These resources cover everything from how to track expenses to avoiding tax scams. If you’ve ever felt overwhelmed by the paperwork or unsure if you're deducting everything you could, now’s a great time to tap into these free insights.

You can check out their lineup on irs.gov.


Big Picture: What’s Changing in 2025?

The IRS recently released its annual tax inflation adjustments, and here are the highlights that matter most for small businesses:


Standard Deduction

This affects your personal return if your business is a sole proprietorship or pass-through entity:

  • Single: $15,000

  • Married filing jointly: $30,000

  • Head of household: $22,500


Section 179 Expensing Just Got Better

Good news if you’re planning to invest in equipment or software this year:

  • You can now write off up to $1 million in qualifying business purchases right away.

  • The phase-out threshold is now $2.5 million, giving you more wiggle room to grow.

This can be a huge tax-saving strategy if you’re upgrading computers, tools, vehicles, or other essential equipment.


Mark Your Calendar

  • June 17, 2025 – Time to send in your second-quarter estimated tax payments if you’re self-employed or operate a pass-through entity.

  • Ongoing – Keep your records updated (trust us, future-you will thank you come tax time).


What’s Going On at the IRS?

You might notice longer wait times if you try to call the IRS this year. They’ve trimmed down about 11% of their workforce, and they’re also slashing their IT budget by $2 billion.

What does this mean for you?

  • Expect slower response times.

  • File electronically whenever possible to avoid delays.

  • Use IRS online tools or work with a trusted accountant to get ahead of any issues.


1099-K Reporting: Heads-Up for Side Hustles & Online Sales

If you use platforms like PayPal, Venmo, or Etsy, starting this year you’ll get a 1099-K if your total payments hit $5,000 or more—a lower threshold than before. Make sure you’re keeping clear records so you don’t get surprised at tax time.


Action Items for May

Here’s your quick to-do list:

  • ✅ Review your 2025 tax position with your accountant.

  • ✅ Take advantage of Section 179 if you’re making purchases.

  • ✅ Update your bookkeeping—don’t fall behind!

  • ✅ Use IRS resources during Small Business Week.

  • ✅ Set a reminder for your June estimated payment.


Final Thoughts

We know taxes and IRS updates aren’t the most exciting part of running a business—but staying ahead of the changes now can save you time, stress, and money down the line. If you ever feel unsure about how these updates apply to your specific situation, contact us today at 603-541-7485 or schedule a free consultation.


Here’s to a productive (and profitable!) May!

 
 
 
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