2025 Tax Return Prep for Small Business Owners

A calm, clear guide to getting organized, saving time, and understanding what changed

Tax season does not have to feel rushed, confusing, or reactive. With a little preparation, you can move into your 2025 tax filing season with clarity, confidence, and far fewer surprises.

This guide will walk you through what to gather, how to prepare your records, and what has changed for 2025 under the One Big Beautiful Bill Act. The goal is simple. Help you walk into your tax appointment organized, informed, and positioned for better outcomes.

Step One: Clean books come first

Your tax return can only be as strong as your records. Before you gather tax forms, make sure your bookkeeping is complete and accurate.

Here is your starting checklist:

• Reconcile all bank and credit card accounts through December 31, 2025

• Match deposits to income and identify transfers, loans, and owner contributions

• Categorize expenses consistently and reduce miscellaneous categories

• Confirm payroll totals match Forms 941, W-2, and W-3

• Prepare a Profit and Loss, Balance Sheet, and General Ledger

Clean books reduce preparation costs, prevent errors, and give your preparer room to focus on tax strategy instead of cleanup.

Step Two: Build your tax prep packet

Think of this as one folder that contains everything your preparer needs.

Business owners should gather:

• 1099-NEC, 1099-K, 1099-INT, 1099-DIV, 1099-B, and K-1s

• Merchant processor summaries from Stripe, Square, PayPal, Shopify, and Amazon

• Payroll reports and year-end filings

• Loan statements showing interest paid

• Mileage logs with dates, miles, and business purpose

• Home office information and expenses

• A list of major equipment or vehicle purchases

• Owner contributions and distributions

Individual taxpayers should gather:

• W-2s and all 1099s

• Mortgage interest and property tax documents

• Charitable donation receipts

• Childcare and dependent information

• Estimated tax payments made during 2025

Step Three: What changed for 2025 that could affect your return

Even if your income stayed the same, your return might not.

Updated standard deduction amounts

For 2025, the base standard deduction is:

• 15,750 for single and married filing separately

• 23,625 for head of household

• 31,500 for married filing jointly

These increases can shift whether itemizing makes sense for your household.

Higher state and local tax deduction limit

The SALT deduction cap increased to 40,000 for 2025, with a gradual phase-down for higher income households. This change may make itemizing worthwhile again for many homeowners and high tax state residents.

New deductions for tips and overtime

For tax years 2025 through 2028:

• Qualified tips may be deductible up to 25,000 per year

• Qualified overtime premiums may be deductible up to 12,500 or 25,000 for joint filers

These deductions have income limits and require proper payroll reporting, but they can meaningfully reduce taxable income for eligible workers.

New personal vehicle loan interest deduction

If you purchased a personal-use vehicle in 2025 using a loan, you may be able to deduct up to 10,000 of interest paid per year. Income limits apply, and the vehicle must meet federal eligibility rules.

Additional deduction for seniors

Taxpayers age 65 and older may qualify for an additional 6,000 deduction, or 12,000 for married couples where both spouses qualify, subject to income limits.

Step Four: Add a one-page change log

Include a short summary for your preparer that answers:

• Did you start or close a business in 2025

• Did you have new income sources

• Did you make major purchases

• Did your household change

• Did anything unusual occur

This single page prevents missed deductions and reduces back-and-forth emails.

Step Five: Smart questions to ask your preparer

• Should I itemize in 2025

• Do any new deductions apply to me

• What can I improve now to make next year easier

The most important habit

Set aside one focused hour to review your year before tax season begins. This one habit changes your experience entirely. You move from reacting to planning, from stress to stewardship.