As 2025 kicks off, California’s small business owners are facing a shifting financial landscape that could have significant implications for the future of their business. While the specifics of upcoming tax revisions are still taking shape, and there is uncertainty regarding the impact of a new administration in Washington, it’s important for small business owners to stay informed and work closely with a trusted CPA partner to effectively navigate these impending changes.
While I was with family and friends over the holidays, I was asked a variety of questions to help them understand upcoming changes in business and finance, and how they should prepare. Here are some of the key insights I shared to help cut through the noise so California small businesses can stay compliant, minimize financial burden, and make sense of what comes next in 2025.
Ready, set, go: file your company’s BOI
To BOI or not to BOI (beneficial ownership information), that is the question that has loomed large throughout 2024 and carries into 2025. Multiple conflicting alerts from the federal court of appeals have delayed the deadline for businesses to file. At the time of writing this article, businesses are not under any obligation to file BOI by the previous deadline set for January 13, 2025.
Under the Corporate Transparency Act, businesses are required to disclose Beneficial Ownership Information – details about the people behind their business to enhance transparency and protect from illicit activity – to the Financial Crimes Enforcement Network. Ongoing litigation in the federal court of appeals has stalled the official timeline for business owners to file in 2025.
To stay up to date on the latest decisions and navigate the continued uncertainty of the status of BOI, it’s critical for busine
ss owners to work with a trusted CPA professional to remain compliant and avoid penalties.
Hold tight on changing your classification
There’s a lot of buzz across social media about changing your small business classification – whether that be from an S corp to a C corp, or an LLC – in anticipation of potential tax reforms from the incoming federal administration. While the anxiety around the unknown is understandable, financial advice diluted into a minute-long social media video is not a one-size-fits-all that will work for your businesses’ unique situation.
It is important for business owners to remember the intention behind why they chose their classification in the first place, and to sit tight until formal tax reforms are issued by Congress later in the year. For aspiring business owners in the process of classifying their entity, working with a trusted CPA to define the goals of your proposed entity prior to classification will help to ensure clarity and the longevity of your burgeoning small business.
The economic boulder is nearing the top of the hill
It’s no secret that the past few years have presented economic challenges to business owners and consumers alike, and the uncertainty of impending tariffs and tax revision provisions are still yet to be seen. But there’s no reason to completely lose hope – there are positive indicators that the economy is slowly picking up momentum. Home sales jumped to an eight-month high in November, the highest it’s been since February 2023. The labor market remains strong, with unemployment claims at an eight-month low. The S&P 500 climbed 23% in 2024, following a 23% rise in 2023, which made for the strongest back-to-back years since 1997-1998.
In my 11 years as a CPA, I’ve seen the economic pendulum swing in both directions and my biggest piece of advice to small business owners is to be strategic, not rash, in their decision-making, and be patient with the results. My clients’ most overwhelming financial burdens are issues that CPAs encounter on a daily basis, and we have the tools to help your small business navigate the challenges ahead in 2025.
Dalton Sweaney is a partner at Gray, Salt & Associates, a full-service accounting firm in Claremont, and is a board member of CalCPA. At GSA, Dalton services small businesses, entertainment industry clients and individual tax clients.
