2025 Tax Law Adjustments for Franchise & Restaurant Owners

As tax season unfolds in 2025, franchise and restaurant owners face critical changes that could impact their bottom line more than they expect. Each year, the IRS updates tax brackets, standard deductions, and reporting requirements to reflect inflation and economic shifts. This process is essential—it helps prevent unexpected tax increases just because of inflation. But understanding these adjustments isn’t always straightforward, especially when running a complex franchise or restaurant business.

At QMK Consulting, New York City’s go-to accounting firm specializing in franchise and restaurant accounting, we know how vital it is to stay ahead of these changes. Mohamed Karmous, our franchise accounting expert and restaurant accounting advisor, works closely with business owners to help them harness these tax adjustments to their advantage—minimizing tax burdens and maximizing profitability.

What Are Inflation Adjustments and Why Should You Care?

Inflation means everything slowly costs a bit more over time—from supplies in your kitchen to employee wages. To make sure you’re not penalized simply because of rising prices, the IRS adjusts key tax figures every year.

For 2025, here’s what’s new:

• Bumped-Up Standard Deductions: If you file taxes as a single individual, you can now deduct $15,000 from your taxable income—up $400 from last year. Married couples filing jointly can deduct $30,000 (an $800 increase), and heads of household can claim $22,500, rising by $600.
• Shifted Tax Brackets: To give everyone a little breathing room, the IRS raised income thresholds across all tax brackets by about 2.8%. This means you get taxed at lower rates for a bit more of your income than before.

For franchises and restaurants, which often operate with tight margins, these changes can add up—translating to real cash savings that you can reinvest in your business.

Breaking Down the 2025 Tax Brackets

Knowing your tax bracket isn’t just about preparing your tax return—it’s a powerful tool for financial planning and decision-making.

Here’s a snapshot of the key tax brackets for 2025:

Tax Rate	Individual Filers	Married Filing Jointly	Head of Household
10%	$0 - $11,925	$0 - $23,850	$0 - $17,000
12%	$11,925 - $48,475	$23,850 - $96,950	$17,000 - $64,850
22%	$48,475 - $103,350	$96,950 - $206,700	$64,850 - $100,500
24%	$103,350 - $191,950	$206,700 - $383,900	$100,500 - $191,950
32%	$191,950 - $250,525	$383,900 - $501,050	$191,950 - $243,725
35%	$250,525 - $626,350	$501,050 - $751,600	$243,725 - $365,600
37%	$626,350+	$751,600+	$365,600+

With these brackets in mind, business owners can make smarter choices about salary structures, distributions, and planning year-end investments or purchases.

What’s New with Income Tax Reporting?

Tax compliance isn’t just about paying the right amount by the deadline—it’s about keeping clear records and reporting your business finances correctly. In 2025, new reporting updates come into play for franchises and restaurants, such as:

• Additional disclosures and forms are now required for business income and expenses.
• IRS is focusing more on pass-through income, so accurate reporting there is essential.
• Some tax provisions from previous years under the Tax Cuts and Jobs Act (TCJA) are extended, but they come with tightened reporting expectations.

Missing these updates can lead to costly penalties. That’s why proper bookkeeping and knowledgeable tax advisors are more important than ever.

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How QMK Consulting Empowers Your Tax Strategy

Tax laws and accounting in the franchise and restaurant world aren't one-size-fits-all. They require industry-specific expertise.

At QMK Consulting, our entire focus is helping franchise and restaurant owners manage their financials with precision and strategy. Mohamed Karmous leverages deep knowledge to:

• Pinpoint deductions and credits enhanced by inflation adjustments.
• Develop income tax plans that consider these updated tax brackets.
• Ensure flawless tax reporting tailored to franchise financial structures.
• Identify smart ways to improve your cash flow and profits by understanding your tax position.

Frequently Asked Questions About 2025 Tax Law Adjustments

Q1: How exactly do inflation adjustments lower my taxes?

They increase your standard deduction and tax bracket limits, so more of your income is taxed at a lower rate or exempt. For restaurants and franchises, this could mean keeping more cash on hand.

Q2: Are these tax changes permanent?

Most are adjusted annually based on inflation, but many beneficial provisions from past tax reforms have become permanent.

Q3: How can I make the most of these changes?

Work with a specialized accounting expert who understands franchise and restaurant finance to tailor your tax planning and ensure compliant, optimized reporting.

Q4: Beyond taxes, how will these changes affect my business planning?

Knowing your tax obligations helps you forecast cash flow better and allocate funds towards growth initiatives like marketing or equipment upgrades.

Q5: What if I get my tax reporting wrong?

You risk audits, fines, and delayed returns. Professional accounting services are crucial to keep everything compliant and accurate.

Take Control of Your Taxes with QMK Consulting

Navigating 2025’s tax law adjustments isn’t just about meeting obligations—it’s an opportunity to sharpen your financial strategy and fuel business growth.

Based in New York City, QMK Consulting is your trusted partner specializing in franchise and restaurant accounting. We help business owners move beyond the overwhelm of numbers to clear insights and strategic actions.

To further empower your tax strategy, especially if you are self-employed or navigating complex tax debts, be sure to check out our detailed guide on the IRS Offer in Compromise program. This resource can help you understand how to reduce tax liabilities and regain control over your finances even if you owe back taxes.

Read more here: IRS Offer in Compromise for Self-Employed Taxpayers in 2025

Don’t let tax changes catch you off guard. Book a free profit and cash flow analysis with Mohamed Karmous, our expert in franchise and restaurant accounting. Together, we’ll uncover tax savings and optimize your financial health to build a stronger, more profitable business.

Schedule your free consultation today and start turning tax season into growth season.

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