Understand the Tax Details When Starting a Business

If you’re thinking about starting a business, make sure you understand your federal tax responsibilities before opening your doors. IRS Publication 583, Starting a Business and Keeping Records, covers the basics. Your business structure (such as a sole proprietorship, partnership, limited liability company or corporation) determines which forms you must file and which taxes apply, including income, self-employment, employment and excise taxes.

You may also need an Employer Identification Number for tax purposes, and you should be aware of your recordkeeping requirements. Starting a business is exciting, and getting the tax details right is important. Contact the office for assistance.

Businesses Regain Immediate Deduction for R&E Expenses.

If your business conducts research or product development, a significant tax law change could unlock tax savings. The 2025 tax legislation, commonly known as the One Big Beautiful Bill Act (OBBBA), reinstated the ability to immediately deduct domestic research and experimental (R&E) expenses.

This change reversed a key provision of the Tax Cuts and Jobs Act (TCJA) that required businesses to capitalize and amortize domestic R&E expenses over five years and foreign R&E expenses over 15 years. As a result, you may have new tax-saving opportunities as you prepare your 2025 tax return and plan for 2026.

What the Change Means for Your 2025 Filing

Beginning with eligible 2025 expenses, businesses can once again deduct U.S.-based R&E costs in full in the year they're incurred. This can significantly reduce taxable income and improve cash flow.

The law also provides flexibility for prior-year R&E expenses. You can potentially accelerate deductions that previously you would have had to spread over multiple years.

Strategies to Maximize R&E Tax Benefits

Businesses should consider the following when assessing R&E expenditures:

Amend returns for prior years. Small businesses (generally those with average annual gross receipts of $31 million or less over the past three years) may be able to apply the rule retroactively. If eligible, you can file amended returns for 2022, 2023 and/or 2024 to claim immediate deductions for domestic R&E expenses previously amortized and, potentially, receive a tax refund for those years. You must file the amended return(s) by July 4, 2026.

More quickly claim remaining deductions. Businesses of any size that capitalized and began amortizing R&E expenses in 2022, 2023 and/or 2024 can accelerate their deductions for the remaining unamortized balance. You can deduct it entirely on your 2025 return or split it ratably between your 2025 and 2026 returns, rather than continuing amortization over the original five-year period.

Bring research activities back onshore. The immediate deduction makes domestic research activities significantly more attractive from a tax perspective. While under prior law, U.S.-based R&E already benefited from shorter amortization periods, the difference between an immediate deduction and a 15-year amortization schedule for foreign research further strengthens the incentive to locate R&E activities in the United States.

Consider the research credit. A tax deduction reduces your taxable income, while a tax credit reduces your tax bill dollar-for-dollar and is generally more valuable. You may be eligible for the credit for "increasing research activities," but fewer types of expenses qualify for the credit than for the R&E deduction. While you can benefit from both, you can't receive a double tax benefit for the same costs.

Seek Guidance

The return of the immediate deduction for R&E expenses can bring planning opportunities for businesses.

People who've never built anything love telling builders how to build.

Back in the 1950s a business owner named Sam had a small mom-and-pop store but wanted to open multiple discount stores in small towns.

Everyone around him told him it was stupid. They said small towns couldn't support it.

But Sam had done the research and wasn't flying blind. He ended up opening the first Walmart in Rogers, Arkansas anyway. Population 5,700.

That same year, Kmart launched in big cities with all the money and advantages. 

By by 1991, Walmart was the largest retailer in America.

Kmart filed for bankruptcy in 2002. While Walmart has around 5,000 locations in the US as of 2026.

Sam didn't ask the peanut gallery for permission. Others laughed at him but he bet on himself anyway. And the research he did early on is why his stores are still going strong today.

Unfortunately most business owners listen to the wrong people.

They get in your head when you're already stressed out and pretty soon you start doubting everything.

You need discernment. Listen to people who understand risk vs recklessness. Who've been where you're trying to go. Who understand setbacks, where to pivot but also when to push even harder.

Everyone else? Noise.

Stop taking business advice from people who've never run a business.

Who Are You Listening To?

 

When you run a business, everyone suddenly has advice.

Friends. Family. People who have never built anything.

They mean well most of the time.

But opinions from people who have never carried the risk of ownership can quietly destroy your confidence.

Entrepreneurship requires judgment.

You need to know the difference between reckless advice and experienced guidance.

The voices you listen to will shape the decisions you make.

3 go-to strategies when your prospect isn’t actively shopping.

 

1. The Comparison Bomb

Still missing key incident alerts. Want a side-by-side breakdown?”

Create a little FOMO. You're not saying they're doing something wrong, you're hinting that others are doing it better.

This works especially well with execs. Because what do execs care about more than anything?

What their peers are doing that’s new, cutting-edge, and just might make them look behind.

You can’t get on their priority list if they aren’t in the right awareness stage. But you can make them think they’re missing something that already is.

2. The Invisible Cost Angle

“CPA engineers spend 5–10 hours a week untangling codes and chasing down undocumented benefits, but that time never shows up on any report. It just quietly kills sprint velocity.”

The best problems to highlight in outbound aren’t always the loud, obvious ones — they’re the silent ones your prospect has learned to live with.

3. The “Why Now?” Trigger

“Google’s phasing out third-party cookies, and marketing teams without a first-party data strategy are already seeing weaker retargeting performance. The gap’s only going to widen this quarter. Want to see how others are adapting?”

This works because it:

References a clear, time-sensitive shift Creates urgency Positions the solution as part of what top performers are already doing

Thanks for reading!

Sell the Problem (Not the Solution)

 

Nobody cares about your product if they don’t believe they have a problem.

That’s why most emails that pitch the product fall flat. Especially when you’re selling something new or nuanced.

Here’s an example from a client that sells a recruiting automation tool:

Bad message:

“Save hours per week using our AI-powered recruiting assistant.”

Better message:

“Most hiring managers are still spending 5–8 hours per week screening resumes manually. We found that most of them don’t realize how much qualified talent they’re missing because they can’t get to every applicant in time.”

This reframes the product from "automation" to "talent loss". A much harder problem to ignore.

Here’s another example from a client selling an internal knowledge platform:

Bad message:

“Centralize your company knowledge in one easy-to-use platform.”

Better message:

“Most teams don’t realize how much time they waste answering the same internal questions over and over. When knowledge lives in Slack threads and individual brains, scaling breaks down fast. Especially when onboarding new hires.”

People Building Right Now

If you are an entrepreneur reading this, know this:

Your work matters.

Your perspective matters.

Your leadership matters.

Whether you are running a growing company, launching your first service, or expanding into new markets, you are part of a long and powerful legacy of people who dared to build.

And if you support businesses, keep doing that. Refer them. Share their work. Speak their names in rooms full of opportunity.

Because when entrepreneurs rise, entire communities rise with them.

We celebrate your courage, your creativity, and your commitment to growth.

Keep building.

Keep leading.