Tax Laws Impacting Small Businesses: 2025

Two new key tax laws that may impact your business in this 2025 tax season:

New IRS Reporting Requirements for Venmo, PayPal, and Other Payment Platforms

The IRS is now requiring payment processors like Venmo, PayPal, and Cash App to report payments for goods or services that total over $600 annually. This change primarily affects small businesses that use these platforms for customer transactions.

Action Item: If you use payment processors for business transactions, keep accurate records to report income correctly to avoid any compliance issues. 

Changes to Qualified Business Income (QBI) Deduction

Small business owners who operate pass-through entities can benefit from the Qualified Business Income Deduction (QBI), which allows them to deduct up to 20% of their qualified business income. In 2025, the IRS has refined the rules on which businesses qualify, with an increased focus on income limits and eligibility criteria.

Action Item: If your business has substantial income, consult with your tax preparer to ensure you are maximizing the QBI deduction and understanding the limits that apply to your specific situation.