Tax season looks different depending on your situation. Whether you’re expecting a refund or a bill, it’s worth understanding the deductions and benefits available to you, especially if you own a business. If you’re a franchise owner, or considering becoming one, a conversation with your CPA before filing is always worth the time. In the meantime, here’s an overview of some of the top tax benefits available to business and franchise owners today.
Common Tax Benefits for Business Owners
It Depends on How You’re Structured
One of the advantages of business ownership is access to a range of tax benefits and deductions. Which ones apply, and how much you can deduct, depends heavily on how your business is structured. A business can operate as a sole proprietorship, LLC, partnership, cooperative, C corporation, or S corporation, and each structure has different rules and rates for taxation. Certain business entity tax rules are also set at the state level, so how a business is taxed in California isn’t necessarily how it would be taxed in another state.
Common Deductions to Know
Some of the more common general tax benefits for business owners include the ability to write off expenses like office rent and equipment, along with fully deductible interest on business loans. Owners can also expense certain items typically used for personal purposes, such as a vehicle, as long as they’re used for business and follow IRS guidelines. Generally speaking, the more legitimate deductions a business takes, the less taxable profit remains.
How Current Tax Law Affects Franchise Owners
A Major Update: The One Big Beautiful Bill Act
Several of the tax provisions franchise owners have relied on since 2018 were originally scheduled to expire at the end of 2025. In July 2025, new legislation called the One Big Beautiful Bill Act made two of the most significant business tax provisions permanent, removing that expiration date.
The Pass-Through (QBI) Deduction
The Section 199A deduction allows owners of pass-through businesses, including S corporations, partnerships, and sole proprietorships, to deduct 20 percent of qualified business income. This deduction was set to expire after 2025 but has now been made a permanent part of the tax code.
Equipment Expensing (Bonus Depreciation)
Bonus depreciation allows businesses to deduct a large percentage of a qualifying asset’s cost in the year it’s placed in service, rather than spreading that deduction out over several years. This benefit had been scheduled to phase down annually and disappear by 2027. Recent legislation restored it to 100 percent, on a permanent basis, for qualifying property.
Other Changes Worth Asking Your CPA About
A few other provisions were also updated as part of the same legislation, including changes to how business interest expense is calculated and limited. Because these rules involve thresholds, timing requirements, and exceptions that vary by business structure and situation, it’s worth reviewing your specific circumstances with a CPA rather than relying on general guidance alone.
Own a Franchise and Save Money
Being a business owner, and more specifically a franchise owner, comes with real advantages, from being your own boss to having more control over daily decisions. Add in the available tax benefits on top of the industry’s earning potential, and franchise ownership becomes an even more compelling opportunity.
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*This content is intended for general informational purposes only and is not tax advice. Tax outcomes vary based on individual circumstances, business structure, and state law. Please consult a qualified CPA or tax professional before making decisions based on this information.*