A Year of Shifting Tax Rules and New Planning Opportunities
The 2025 tax year brought significant adjustments that affected individuals, business owners, and growing organizations alike. From evolving federal regulations to state-level incentives and changes stemming from past legislation like the SECURE 2.0 Act, taxpayers faced a landscape that was both challenging and full of opportunity.
At Burke CPAs & Advisors, we’ve spent the past year helping clients anticipate these changes, reduce their tax burden, and build long-term strategies aligned with growth. As we look back at the key updates of 2025—and ahead to what 2026 may bring—our goal remains the same: to keep you informed, prepared, and empowered to make confident decisions.
Key Federal Tax Changes Impacting 2025 Filings
1. Inflation-Adjusted Thresholds and Brackets
Each year, inflation adjustments affect standard deductions, tax brackets, and various credits. In 2025, many thresholds rose again, offering modest relief to individuals and families navigating higher prices. These changes impact decisions around income timing, charitable giving, and business deductions.
2. Impacts From SECURE 2.0 Still Taking Effect
While major components of the SECURE 2.0 Act rolled out in 2024, 2025 marked the first year that many small and mid-sized businesses fully felt the effects—especially around retirement plan administration.
Most notable for 2025:
- Automatic enrollment requirements will begin to apply to newly created retirement plans starting in 2025.
- Businesses with fewer than 10 employees or those in operation for less than three years are exempt.
- Eligible small businesses may receive up to $500 per year in tax credits for implementing auto-enrollment.
If you’re planning to launch a new plan, the administrative and planning steps are essential. Burke Advisors help clients streamline the compliance process and maximize available incentives.
3. Continued Growth of the Self-Employment and Side-Hustle Economy
The IRS continued to expand guidance on digital payments, Form 1099-K thresholds, and reporting requirements for freelance and gig-based income. For the millions of Americans with a side income, tax responsibilities have become both more precise and more complex.
Common concerns this year included:
- When income is considered from self-employment
- How to track cash, PayPal, and app-based earnings
- What expenses qualify for deductions
- Whether quarterly taxes are required
Burke CPAs worked with an increased number of side-hustle and gig-economy clients to help them avoid over- or under-paying taxes and to maximize allowable deductions.
State & Local Updates: Opportunities Many Businesses Missed
1. Growing Availability of State-Level Incentives
States continued using tax incentives to support small businesses—especially those investing in technology, equipment, and workforce expansion.
For example, Kentucky offered tax credits ranging from $3,500 to $25,000 for small businesses with 50 or fewer full-time employees that hired at least one new employee and invested over $5,000 in qualifying assets.
2. Increased Scrutiny on Compliance and Security
Although not a tax law, PCI compliance continues to play a significant role in business risk management and audit readiness, particularly for businesses that handle credit card data.
For our clients, 2025 brought:
- Increased auditor attention on data security controls
- More frequent inquiries about third-party payment processors
- Higher penalties for non-compliance
Because breaches can lead to financial losses, chargebacks, and reputational damage, maintaining compliance is part of a holistic financial risk strategy.
Business Tax Planning Themes That Defined 2025
1. Entity Structure Re-Evaluation
As tax rules shift, many business owners revisited their corporate structure to improve liability protection, meet growth goals, or reduce unnecessary taxes.
From sole proprietorships to LLCs to S Corps, choosing the right structure can influence:
- Tax liability
- Operational flexibility
- Long-term succession planning
- Eligibility for certain tax credits
Burke CPAs & Advisors continued guiding clients through these decisions using a long-term, strategy-first approach.
2. Cost Segregation and Asset-Based Tax Savings
Real estate investors and growing businesses leaned deeper into cost segregation strategies to accelerate depreciation and increase cash flow. As interest rates fluctuated throughout the year, these techniques helped offset overall operational costs.
3. Strategic Tax Credits & Incentives
From federal R&D credits to local hiring incentives, 2025 saw wider availability of credits that directly reduced tax liability for qualifying activities.
What’s Ahead in 2026: Key Areas to Watch
1. Possible Expiration of Key Tax Cuts
Several provisions from the 2017 Tax Cuts & Jobs Act are set to sunset after 2025 unless extended, potentially affecting:
- Individual tax brackets
- Standard deductions
- The Qualified Business Income (QBI) deduction
- Limits on certain itemized deductions
This could significantly change tax planning strategies for individuals and pass-through business owners.
2. Continued Enforcement Activity
The IRS is expected to maintain increased audit enforcement for high-income individuals, digital platform earners, and businesses with inconsistent reporting practices.
3. Ongoing Rollouts from SECURE 2.0
More provisions, including expanded catch-up contributions and Roth-related adjustments, may create new planning opportunities for both business owners and employees.
2025 Was a Year of Change, 2026 Will Be a Year for Strategy
The 2025 tax landscape presented new obligations but also meaningful opportunities for those prepared to take advantage of them. Whether you’re a business owner navigating growth, a side hustler building a new income stream, or an investor managing complex assets, strategic tax planning is more critical than ever.
At Burke CPAs & Advisors, we’re here to help you evaluate your situation, uncover hidden savings, and plan confidently for the year ahead.
Get Expert Guidance for 2026
If you want clarity around tax changes or want to build a forward-looking strategy that protects your income and positions you for growth, our advisors are ready to help.