"The biggest thing we have going on right now in the world of taxation is uncertainty," said Chris Wilcox, partner/Las Vegas market leader, Eide Bailly. "Business owners don't know what the next year is going to look like at the end of 2025. We have a number of tax provisions that are going to expire such as bonus depreciation, which is phasing down. There's the section 199A deduction which is huge, and the top marginal tax rate is going to go from 37 percent to 39.6 percent." Automatic changes will occur by the end of the year if Congress doesn't extend or replace the current law.
That's a lot, all at once. But taken one thing at a time, it's digestible. Or at least understandable.
Change is the Only Constant
The first item, bonus depreciation, applies when businesses make equipment purchases. Companies can't immediately deduct those costs from their taxable income; they have to follow a depreciation schedule over several years, the idea being they're getting use from the purchase, after all.
This means businesses can't fully account for the expenses in real time. Bonus depreciation allows businesses to deduct an expense when it's made. New tax laws are changing that.
"In '25 you're only going to be able to write off 40 percent of the cost of that equipment," said Wilcox. "That's a change that's going to affect taxpayers and companies with a lot of yellow iron, the bulldozers, backhoes and earthmovers. That equipment is expensive and construction companies like to buy and take the deduction of the cost." But where in 2022 that deduction was 100 percent, in 2023 it was 80 percent, in 2024 it was 60 percent and this year it's 40 percent. That's a big change.
And, it may not happen. "I would expect Trump to get his bill through for Congress and would expect other incentives to spur economic development, such as 100 percent bonus depreciation," said Bryan Keller, partner-in-charge real estate services group, RubinBrown. Keller also expects follow through on no tax on tips or overtime, which will have a positive impact on Las Vegas. "I expect a more comprehensive tax bill before Trump's final term ends as president."
A deduction for businesses that may be going away by the end of 2026 is the section 199A Deduction, which basically states that for entities other than C corporations -- S corps, LLPs, partnerships -- pay taxes on 80 percent of their net income. Pass-through entities, where taxes apply to personal income from the business rather than being taxed at both business and personal level, those businesses can deduct 20 percent. According to the IRS, the qualified business income (QBI) deduction is "limited to the lesser of the QBI component plus the REIT/PTP (real estate investment trusts/publically traded partnerships) component or 20 percent of the taxpayer's taxable income minus net capital gain."
Which means in less complicated language, "If you're a passthrough corporation that gets taxed on your personal tax return, an S-corp that has a million net income, you would pay taxes on $800,000 of that net income in 2025," said Wilcox. In 2026, you'd pay taxes on $1 million of the $1 million income.
There are exceptions, of course. Not every business qualifies for a qualified business income deduction. But unless new tax law replaces existing, there won't be a deduction to qualify for in 2026. According to Mike Bosma, managing principal/owner, Keystone CPAs, there's hope of keeping the deduction - the president is considering making it permanent.
Another possible deduction is the return of DPAD (Domestic Production Activities Deduction) repealed as part of the Tax Cuts and Jobs Act of 2017 (TCJA), and replaced by the Qualified Business Income Deduction.
"It makes it more attractive to make things in the United States," said Bosma. "It's all part of the president's policy agenda, so in essence it would reduce business owners' taxes by at least another 20 percent, because they're making things in the United States." That policy is predicted to happen by late May.
Owning, Gifting, Taxing
Assembly Joint Resolution No. 1, 2025 Nevada Legislature, is designed to grandfather in legacy Nevadans, longtime residents, while still using property taxes to bolster the state economy.
The proposal is to amend the Nevada Constitution relating to the assessment and taxation of real property when sold or transferred. Currently the formula in determining property tax is taxable value of improvements less all applicable depreciation and obsolescence. Depreciation is accounted for at 1.5 percent for each year of adjusted actual age. The proposal would amend Nevada's Constitution so the first fiscal year after the property is sold it is ineligible for any adjustment to the value of improvements based on the age of the improvement and certain partial abatements.
For any fiscal year after that, any adjustment to the value of improvements based on the age of the improvements is to be determined as if the improvements were new on the date of sale.
All of that is to say, if two people buy the same house on the same block, they're going to pay the same tax. "That rings true for most people, if set things to value and lower the rate, then it's tax neutral and it's portioned fairly between the taxpayers," said Bosma. "But ultimately that will result in some increases for some because, if others' taxes are going to go down and it's tax neutral, then others are going to go up. But right now, in southern Nevada, there are legacy neighborhoods. They're nice neighborhoods, but they've been depreciated for years which is why they pay less property taxes than the new home subdivisions."
There's a significant difference for property taxes for businesses. Someone who owns their home is going to look at comparable sales, because Nevada's constitution provides that home can't be taxed on a value higher than fair market value or full tax value. So if the county assessor lists it at $1 million but it's only worth $500,000, the owner can appeal to the county board of equalization for relief.
Even if the value of the real property hasn't changed, businesses can get property tax relief if the value of the business decreases, because the business includes the real estate and now isn't worth what it was or what it's being taxed on.
Another big issue indirectly affecting business owners is the reversion of the lifetime exemption for estate tax. Basically, it's at $14.8 million now and it will revert back to about half of that.
That's huge. The lifetime gift/estate tax exemption in 2025 is $13.99 million, $10,000 less than $14 million, or $28 million for couples. That amount was determined by TCJA. If the law isn't extended, if it's allowed to sunset, the single taxpayer limit will revert back to $7 million.
TCJA sunsets at the end of 2025; if it expires, the estate tax is just one of multiple impacts. For example, in 2025 the top tax rate remains 37 percent for individual single taxpayers with incomes greater than $626,350 or $751,600 for married couples filing jointly. That rate would revert to 39.6 percent in 2026, said Keller. Standard deductions, doubled under TCJA, will decrease; taxpayers can claim personal exemptions. In addition, the $10,000 cap on state and local tax (SALT) deductions will be removed, eliminating the current deduction limit.
Another change happening by September 30, 2025 is the end of paper checks for tax refunds. The change didn't get a lot of press when it happened -- there's been a lot going on in 2025 -- but it's significant that the IRS will no longer issue paper checks unless the recipient doesn't have a bank account. Some states have already made the change to 100 percent electronic.
It takes some getting used to, allowing the IRS to have all your banking information, Wilcox acknowledges. Though he pays taxes online and gets refunds through direct deposit, it took him years to make the change. It's more efficient, reduces the number of checks sent out by the Department of Treasury that never get cashed or acknowledged, and prevents refund checks being lost or stolen. It's just not that comfortable.
But then, the IRS already has the ability to get individual bank account information. "If you're not paying your taxes, they can levy that account, so what do we really accomplish [by requesting paper checks]?" asked Wilcox.
The IRS isn't supposed to be the enemy. "The IRS is just an extension of Congress tasked by Congress to administer the tax law that Congress has passed, and for the most part, the IRS does a good job, they're fair and they're not out to get you as long as you try to follow the rules," said Wilcox. But with executive orders cutting back on personnel, it may be harder to find agents to even work with.
And, while the IRS may not be the enemy, recent years have seen a significant uptick in audits.
"Before we started focusing on this piece of my practice, I'd maybe done a dozen audits in 30 years," said Bosma. "There just weren't a lot of audits. I'm currently defending 70 audits."
The increase may be in part due to initiatives to, in broad terms, tax the rich. And whether or not business owners identify themselves as rich, most business owners of any size business show a lot of income, said Bosma. However, that income may be tied up in inventory or getting inventory into the country, or today, dealing with tariffs. However it happens, President Biden hired a number of auditors, increasing the number of audits and costing taxpayers who have to hire professionals to defend those audits.
"The good thing when they hired all those people is [with] the amount of tax returns that were processed, telephone wait times went down significantly, all of that's great, but unfortunately now we're seeing service response times starting to increase," said Bosma.
That's not going to change any time soon. Executive orders instructing the IRS to issue early buyouts of senior IRS employees plus a hiring freeze will make it harder to connect with agents. The switch from paper checks to electronic can be seen as making the process more efficient because there are fewer people onboard.
That efficiency doesn't make up for lost connections. For someone like Wilcox who works frequently with the IRS for clients, there's 40 years of connections on the line. He explained, "People I've gotten to know, people who are very helpful in getting things done, am I going to be able to get hold of them? Will they still be at the IRS? There's going to be fewer people to answer phone calls and that can be a big effect on customers, which is you and I."
Advocacy in Action
Nevada Taxpayers Association (NTA) was formed in 1922 to advocate for Nevada's taxpayers and for sound fiscal policies in tax and expenditure matters. The main thing being advocated for in the 2025 Legislature is bills having to do with revenue or tax increases.
"We just want to make sure the legislators are thinking about and implementing good tax policy," said Yolanda King, president, NTA. "A good piece of what I'm referring to is that any tax policy they implement, that they're fair and equitable tax policies that don't address one particular group of taxpayers."
The other piece of good policy being advocated is to ensure efficiencies either at local level or state level, so policies aren't implemented that pose an administrative burden to any level of government, or make it difficult for regular taxpayers to understand. "Sometimes there are complexities," said King. "There can be misunderstandings of who [policy] applies to or how it should be calculated."
One specific piece of legislation NTA is highlighting is the expectation that a tax on digital products will pass this session. It's going on the fourth time it's been presented, so it's likely it will be approved.
"Once you had tangible goods like books and CDs and when they were in tangible form they were subject to sales tax that was assessed," said King. Today eBooks and streaming music and movie services mean those products don't have sales tax assessed. "It's the fourth time its been introduced. So we sent out a system alert that hey, we anticipate the digital products sales tax coming through."
Other alerts for this legislative session include transportation revenues. With more efficiencies in vehicles and more electric vehicles on Nevada roads, transportation revenues have declined. Those revenues are used for maintaining and expanding roads, so there's a need to find revenue to continue maintaining those services.
King is also watching AB276, regarding the Nevada commerce tax. Currently a business making gross revenue of $4 million or more in Nevada is subject to paying the commerce tax.
"AB276, is attempting to adjust that $4 million threshold to adjust with CPI (consumer price index)," said King. The issue with that threshold not adjusting to CPI is that cost of living is increasing every year, so businesses that weren't paying the commerce tax could have to start.
"The correlation there is obviously business expenses increase because of CPI increase, which means they could be obviously charging more for those costs of living increases, which means at some point they'll be receiving more revenue," said King. Because the tax is based on a gross revenue threshold, businesses could be pushed into having to pay that commerce tax just because their gross revenues exceeded $4 million on that threshold. "So that CPI adjustment just basically allows for that $4 million to adjust based on CPI increase."
Nevada's tax environment is holding fairly steady. "You've got a balanced government, Republican governor and Democratic houses," said King. "It's going to be a little more difficult to try to push through any kind of sales or property tax increases, any revenue increase because of that balanced government."
In Brief
AT&T has agreed to acquire the majority of Lumen's Mass Markets fiber business for $5.75 billion. Lumen operates as CenturyLink and Quantum Fiber in ll states, including Nevada.