Strategic Tax Planning for Entrepreneurs in 2025: Key Wealth-Building Adjustments

The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, has reshaped the tax landscape for entrepreneurs. Permanent changes now prioritize capital mobility, domestic research, and income shifting for small businesses. These adjustments are critical for wealth preservation.

Key strategies include transitioning from an LLC to an S-Corp when net profits exceed $50,000—a MOVE that can save up to 15.3% on self-employment taxes. The now-permanent 20% Qualified Business Income deduction for pass-through entities offers another significant advantage.

Creative solutions like renting a primary residence to a business for 14 days under the Augusta Rule (Section 280A) generate tax-free income. Hiring a spouse under Section 105 HRA allows for full tax-free reimbursement of family medical expenses.

Asset expensing has also been streamlined. Section 179’s new $2.5 million limit enables immediate write-offs for equipment and technology. The reinstated 100% bonus depreciation applies to both new and used business assets.

Income shifting to minor children remains a viable tactic, with payments up to $15,700 shielded from taxes. These measures underscore the importance of proactive tax planning in 2025’s restructured fiscal environment.