Now is the time to be coming up with your plans for the 2025 tax season. You have a year before you’ll be filing business taxes for 2025, and it’s better to plan in advance. TBS Factoring wants to eliminate surprises by helping you understand this year’s changes to tax laws, know what your responsibilities are, and avoid owing money when you file in 2026.
Increased Taxes and Expenses in 2025
Right now, it’s hard to predict where things will lead during 2025. Increased tariffs on several countries will raise costs and impact businesses, but no one can state exactly how high prices will soar. Plus, there are the tax changes enacted by more than three dozen states, and they are:
- California’s Low Carbon Fuel Standard increases of 35 cents per gallon for gas and 45 cents per gallon for diesel.
- Delaware’s Hazardous Substance Cleanup Act tax increases to 1.12% on sales of petroleum or petroleum products.
- Higher fuel taxes in Minnesota (31.8 cents per gallon and New Jersey (2.6 cents per gallon), while New York and North Carolina are reducing fuel taxes.
- Illinois is increasing the franchise tax exemption to $10,000.
- Increased rental vehicle fee of $3 per day in Colorado and $7 in Hawaii.
- Kansas is dropping sales tax on groceries.
- Louisiana increased the sales tax rate, and digital goods are now charged sales tax.
- New tax on EVs, hybrids, and EV charters in two states (Vermont and Wisconsin).
- Ohio is exempting the first $6 million in business gross receipts from Commercial Activity Tax.
- Reductions on corporate taxes in three states (Nebraska, North Carolina, and Pennsylvania), and one state making full expensing permanent (Louisiana).
- Reductions on income taxes in nine states (Indiana, Iowa, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, and West Virginia) and permanent adoption of temporary cuts in one state (South Carolina).
- Tennessee is adding an alternative fuel tax of 21 cents per gallon to hydrogen gas.
One of the first swift actions implemented by the new administration was to freeze federal spending. It’s since been rescinded, but it’s something to consider. Areas of infrastructure like roads and bridges repair with approved funding will take place. If a project wasn’t yet approved, it may not happen. Your drivers need to have a backup plan in case a long road or bridge closure occurs due to structural failures.
You need to have a plan in place to afford the tax increases. If lower taxes impact you or your payroll taxes, make sure you’re aware of them. If fuel prices are increasing due to new tax rates, it’s a great time to sign up for a fuel discount card.
You also need to build up working capital in case of emergencies. In the trucking industry, this is often difficult as clients don’t always pay on time.
Careful budgeting is essential for 2025. If you haven’t started considering where to carefully invest your profits, it’s a good time to consider the future.
Things You Should Already Be Doing
With a new tax year comes responsibilities that your office cannot ignore. Make sure you complete these important checklist items.
Business Taxes and Payments to the IRS
As a business owner, you need to be paying estimated taxes each quarter. If you haven’t been doing this, it’s time to change it. Generally, these tax payments are made via mail or electronically on the 15th of April, June, September, and January. If the 15th falls on a holiday or weekend, make the payment on the next business day.
If you have employees, you also need to pay quarterly or annual employment taxes for them. If you pay once a year, they’re due on January 31st. If you pay quarterly, you pay on April 30, July 31, October 31, and January 31.
You withhold the money each paycheck and deposit it semi-weekly or monthly. If you opt for monthly, deposits are due on the 15th of the month. Semi-weekly deposits are due on Wednesday if paychecks are given out on Wednesday, Thursday, or Friday. If paychecks are given out between Saturday and Tuesday, payments are made on Friday.
Deduct federal employment taxes like federal income tax, Medicare tax, and Social Security tax from each worker’s paycheck. Your employees need to fill out a W-4 so that you know how many deductions to consider when calculating the taxes to withhold. You’re also responsible for paying unemployment taxes, which are paid through your funds and not from your employees’ wages.
Keep an Updated List of All Business Expenses
Some of your business expenses are tax deductions at the end of the year. Make sure you save receipts and keep careful records of the following.
- Charitable donations to nonprofits and charities
- Driver training
- Electronic equipment used solely for business such as phones and tablets
- Fuel costs
- Health insurance costs
- Insurance fees
- Licenses and association dues
- Office supplies
- Trailer, truck, and equipment leases
- Travel expenses like meals and lodging
- Truck maintenance costs
- Uniforms and safety equipment
If you claim deductible expenses, you need to have records in case you’re ever audited. As a rule, the IRS recommends that small businesses keep records for two years from the date a tax payment was made or three years from the date you filed, whichever comes later. Documents related to employment taxes need to be kept for a minimum of four years.
Those are recommendations, but be aware that the burden of proof for any deductions and information on your tax returns is up to you to prove if you’re audited. Many tax experts recommend keeping records indefinitely for that reason.
Make Freight Factoring Part of Your Tax Plan
If you haven’t partnered with a freight factoring specialist, it’s time to change your billing and collections practices. Freight factoring is a financial service where you pay a small fee and have the factor take over the invoicing and collections. You get paid immediately for the work you do, and the factoring company chases payments and handles invoicing.
You get invoices you can upload to your bookkeeping software, which makes it easy to keep financial records for the 2025 tax season. You also enjoy other benefits to freight factoring, such as fuel discounts, unlimited free business credit reports, and same-day payments with 24/7 account access to track payment statuses.
TBS Factoring has some of the lowest factoring rates in the trucking industry. We keep fees low to ensure most of your hard-earned money goes to you. Ask us about freight factoring to help you build a strong cash flow and ensure you’re taking care of your financial obligations with the U.S. government.