What’s on the Horizon for Corporate Tax Policy in 2025?

As 2025 approaches, corporate tax executives are closely monitoring key legislative developments that could significantly impact businesses across industries. Discussions at the recent 2024 Philadelphia Tax Summit highlighted three priorities on everyone’s radar: bonus depreciation, corporate tax rates, and manufacturing incentives under the 2022 tax-and-climate law. 

Bonus Depreciation: A Critical Tool for Business Investment 

The 2017 Tax Cuts and Jobs Act (TCJA) introduced bonus depreciation, allowing businesses to deduct the full cost of qualifying assets, such as equipment, in the year the expense was incurred. However, this benefit began phasing out in 2022, creating uncertainty for companies reliant on these deductions to optimize cash flow and reinvest in growth. 

Corporate Tax Rates: Stability vs. Change 

The corporate tax rate, reduced from 35% to 21% under the TCJA, has been a major focus of corporate tax planning since 2017. With many provisions of the TCJA set to expire in 2025, businesses like Comcast Corp. are keeping a close eye on potential changes. 

Tom Donnelly, Senior Vice President for State and Local Tax at Comcast, highlighted the significance of ongoing negotiations: A higher corporate rate could impact profitability and investment decisions, making this a critical issue for businesses and their advisors. 

Manufacturing Incentives: A Growth Driver 

The Inflation Reduction Act of 2022 introduced substantial incentives for manufacturers, particularly in the chemical and energy sectors. These credits have become a cornerstone of business models for many companies in these industries. The future of these incentives remains uncertain as lawmakers debate tax and climate policies in the coming year. 

How Tonneson + Co Can Help 

At Tonneson + Co, we understand how complex and dynamic the tax landscape can be. Our tax advisors are closely monitoring these developments to help clients stay ahead of potential changes. Whether you’re evaluating the impact of bonus depreciation, considering strategies for corporate tax rate changes, or assessing how manufacturing incentives could benefit your business, we’re here to provide tailored guidance. 

If you have questions about how these potential legislative changes could impact your business or want to explore strategies to optimize your tax position, don’t hesitate to reach out to our team. 

Stay informed—stay prepared. Let’s navigate 2025 together.