Expanded and restored deductions:

• 100% bonus depreciation: This provision has been permanently restored, allowing businesses to immediately deduct the full cost of eligible new or used property acquired and placed in service after January 19, 2025. Eligible property includes equipment, computers, and software.
• Section 179 expense deduction: The maximum amount a small business can expense has increased to $2.5 million for 2025, with the deduction beginning to phase out if more than $4 million of qualifying property is placed in service.
• Qualified Business Income (QBI) deduction: The 20% deduction for QBI, which was set to expire at the end of 2025, has been made permanent. Phase-out thresholds have also increased for 2026.
• Research and experimental (R&E) expenses: Domestic R&E costs can now be deducted immediately in the year they are incurred. Small businesses can also retroactively apply these rules to expenses from 2022 through 2024 by amending their returns. 

Vehicle expenses:

• Standard mileage rate: For 2025, the rate for business miles driven is 70 cents per mile, a 3-cent increase from 2024. This provides a simplified alternative to tracking actual costs.
• Actual vehicle expenses: You can deduct the business-use percentage of actual vehicle costs, including gas, oil changes, insurance, and repairs.
• Other vehicle expenses: Regardless of which method you choose, you can also deduct the business portion of car loan interest and state/local property taxes, as well as all parking and tolls for business travel. 

Home office and utilities:

• Home office deduction: If you use a part of your home exclusively and regularly for business, you can claim expenses. You have two options for calculation:
• Simplified method: Deduct $5 per square foot of the office space, up to a maximum of 300 square feet ($1,500).
• Regular method: Deduct a portion of actual home expenses (like mortgage interest or rent, utilities, and repairs) based on the percentage of your home used for business.
• Business utilities: Expenses for a dedicated business phone line are 100% deductible. You can also deduct the business portion of internet, mobile phone, and utilities. 

General business costs:

• Advertising and marketing: All costs associated with marketing your business are fully deductible, including website costs, digital ads, and printing business cards.
• Salaries and benefits: Employee wages, salaries, payroll taxes, and benefits (such as health insurance and retirement contributions) are deductible. Payments to independent contractors over $600 require a Form 1099-NEC.
• Business meals and travel:
• Business meals: A 50% deduction applies to business-related meals with clients, and a 100% deduction applies to meals provided for employees, such as office parties.
• Business travel: Travel expenses, including airfare, hotels, and transportation, are deductible if the trip is for a business purpose.
• Rent and interest:
• Rent: Rent for business property, including office space and equipment, is deductible.
• Interest: Interest on business loans and credit cards is also deductible.
• Professional fees and services: Fees paid to attorneys, accountants, bookkeepers, and other professional consultants are deductible.
• Insurance: Most business insurance premiums, including liability, property, and workers' compensation, can be deducted. Self-employed individuals can also deduct health insurance premiums.