If you are considering starting a small business, this might be the perfect time to do it. The current administration is very pro-business, and their proposed tax policies offer several compelling advantages, particularly concerning tax cuts and bonus depreciation provisions.
Tax Cuts Favorable to Small Businesses
The administration aims to extend and enhance the Tax Cuts and Jobs Act (TCJA) of 2017, which initially lowered tax rates for pass-through entities—businesses where income is taxed on the owner’s personal tax return. This reduction enabled entrepreneurs to allocate more resources toward hiring, wage increases, and business expansion. Making these tax cuts permanent would provide long-term financial predictability, encouraging sustained investment and growth within the small business sector.
Bonus Depreciation Incentives
Under the proposed extensions, businesses may continue 100% bonus depreciation, allowing immediate deductions on qualifying equipment, machinery, and technology investments. This means startups can reduce taxable income faster, improving early-stage cash flow and facilitating reinvestment into the business. Such provisions are particularly beneficial for franchise businesses that are equipment intensive, like restaurants, fitness & wellness, disaster restoration, or insulation, and those aiming to scale operations rapidly into multiple territories or units.
Expansion of Small Business Expensing (Section 179)
Proposed changes may increase Section 179 deductions, allowing businesses to immediately write off expenses like office equipment, vehicles, and software rather than depreciating them over time. This could lead to significant upfront tax savings for startups investing in essential assets.
Encouragement of Domestic Production
By reducing corporate tax rates for companies producing domestically, the administration seeks to incentivize local manufacturing and production. This policy supports small businesses engaged in manufacturing, stimulates job creation and strengthens the domestic supply chain, providing a more stable environment for new enterprises.
Tax Credits for Hiring and Investment
Policies may include workforce-related tax credits, such as credits for hiring employees or investing in economically disadvantaged areas. These incentives can make it more affordable for new businesses to hire and expand operations.
Regulatory Rollbacks
The administration’s commitment to reducing regulatory burdens can lower compliance costs for small businesses. Simplified regulations make it easier for entrepreneurs to start and manage businesses, allowing them to focus more on growth and innovation.
Final Thoughts…
The current tax proposals under the current administration create a conducive environment for starting a franchise business. With favorable tax cuts, enhanced bonus depreciation, incentives for domestic production, and reduced regulatory hurdles, entrepreneurs have multiple financial and operational advantages to capitalize on, fostering a robust foundation for new business ventures.
Why Now is a Smart Time to Start a Business
- Immediate tax savings help offset startup costs.
- Lower ongoing tax rates mean more profitability.
- Incentives for equipment purchases boost growth potential.
- Encouragement for hiring makes scaling easier.
By leveraging these tax policies, new business owners can reduce startup expenses and accelerate profitability. As always, consulting with a tax professional to confirm and maximize these benefits and ensure compliance with changing regulations is essential.
These policies point to one thing: the future of franchising is brighter than ever, and 2025 could be the perfect year for you to take that next step.
Whether you’re exploring franchise ownership for the first time or have always wanted to own a business, now is the time to learn more. Explore the hundreds of opportunities available and discover what aligns with your goals, skills, and lifestyle.
Franchising isn’t just about owning a business—it’s about creating a future you’re excited to wake up to every day.
Here’s to making 2025 a year of growth, opportunity, and independence.
