The opinions expressed by Entrepreneur authors are their very own.
Donald Trump will be the country’s forty seventh president in January. He carries a lot of luggage with him and there are many reasons why people didn’t vote for him. This column is not about that.
This is about business. If we consider a second Trump administration based solely on the way it will impact businesses in this country, it is quite clear that it will be a good one. My company – a technology consulting company specializing in customer relationship management – will experience particularly positive effects.
I’m a realist. I understand that President Trump will not acquire recent customers or introduce progressive products for me. It will not solve the serious labor shortages that make it difficult for me to search out and retain good talent. A second Trump administration won’t have the ability to magically wave a wand and fix future inflation or lower rates of interest. He will not manage my business, collect my debts or pay my bills. However, the Trump administration will impact my company in three significant ways.
1. Taxes
First, my tax bill won’t go up. It may very well go down.
The biggest deduction that probably won’t go away is Qualified business income tax deduction for pass-through entities akin to S corporations and partnerships. My company is an S corporation. This yr I receive a 20% deduction on my business income before it is included on my individual return. This deduction, introduced by the first Trump administration in 2017, is scheduled to retire at the end of 2025.
Many small business owners also took advantage of the $29,200 standard deduction on their jointly filed individual tax returns. However, this deduction will be there cut in half after 2025.
Significant deductions that allowed us to amortize the cost of buying capital equipment in the first yr were reduced this yr and faced further restrictions. Many of my clients who once deducted first-year R&D expenses have been forced to amortize those payments over longer periods attributable to expiring regulations.
Tax rates in 2025 in comparison with 2017 would increase. Capital gains rates would increase. New taxes would likely be imposed on those earning greater than $400,000 a yr.
Overall, if Kamala Harris was elected, taxes would increase for small business owners like me. Now, due to Trump’s intention to increase or make everlasting the 2017 Tax Cuts and Jobs Act, with GOP majorities likely in each the House and Senate, that will not occur.
2. Work regulations
Under the Biden administration, many government agencies were encouraged to issue recent regulations, starting with helping unions easier to arrange prohibition on concluding non-competition agreements. However, three regulations have had a particular impact on my business.
Thanks recent rules for worker classification accomplished earlier this yr, I now find it more difficult to make use of independent contractors. My company relies on freelancers who provide development and training for our clients. We issue invoices for their services. Our contractors earn well and enjoy flexibility. However, I could now have to reclassify these independent employees as employees because the services they perform for my company are “integral” under the recent definitions. This means I have to pay taxes to my employer, provide more protections for my employees, and potentially make my advantages plans – akin to medical health insurance – available to them. My contractors have never asked for this, but now I could have to do it anyway.
For my employees, additional time pay is increasing. From January 2025 recent rules Department of Labor will make employees earning lower than $58,656 a yr eligible for additional time pay, up from $35,568 earlier this yr. This implies that my salaried employees who meet other requirements will be entitled to additional time pay if they work greater than 40 hours per week. My company’s flexible PTO plan has eased the obligation to pay additional time in a given week because an worker can decide to work fewer hours at one other time. However, this rule will undermine this strategy and likely increase my payroll costs.
Finally, the Equal Employment Opportunity Commission issued its decision (*3*)recent rules earlier this yr that hold employers like me accountable for the behavior of our employees each in and out of the office and on online calls. For example, if co-workers are bullying an LGBTQ+ worker at an outside party at a bar on a Saturday night, they could feel that their work environment is hostile and that if I do not do it, I know this, I’m responsible. Another worker on a Zoom call with a salesperson may feel uncomfortable seeing a book on the shelf behind them. Again, I’m responsible as an employer for creation non-hostile environment. To address these concerns, I want to pay employment lawyers, trainers, and a technology company to establish a reporting system.
What do all three regulations have in common? They are not law. These are interpretations of the law prepared by government agencies. There are lawsuits difficult these rules. The Biden administration is responding to those complaints. The Trump administration will not do this, which suggests the rules will either be reversed or not enforced. President Trump will likely not fill leadership positions at the EEOC because they will expire in the next 4 years, leaving the agency toothless and giving me – and many small businesses – some relief.
3. Business environment
True story: A friend who works in the finance department of a large publicly traded company confided to me this week that his company prepared two budgets based on the election results. If Harris won, the budget can be “defensive.” Trump’s budget is “expansion.” For me that says all of it.
If the president influences the economy, it is more elusive than tangible. When the rhetoric from the highest offices of presidency is accusatory, offensive, or disapproving of business, most entrepreneurs circle the wagons. When these same political leaders pass rules and regulations aimed at firms, those firms have to pay for those regulations, which takes away funds for their development. And when leaders point fingers at “big corporations” and the “rich,” they risk causing these entities to disinvest, hire, and spend.
However, the situation is different when the president is pro-business. This is evidenced by the recent increases in stock markets. Similarly, the “expansion” budget at my friend’s company. The reason is obvious: people ride bikes when it’s sunny; they stay inside when it rains. Companies—and the tens of millions of employees who work for them—take more risks and reap more rewards when they know they do not have to fret about the government interfering with their business. This benefit can’t be quantified. But you know it’s there. Here’s why trust of small businesses was higher during the first Trump administration than during the Biden administration.
My company sells sales and marketing software. This is a discretionary investment – one that my clients make when they feel confident enough to take a position in technology that will help their businesses grow in the future. Given the more favorable business climate, I expect many people will start opening their wallets to make this investment.
Of course, there will be challenges under Trump. And there is still a lot of uncertainty. Many economists have warned of the negative impact of tariffs, which they plan to oppose. Others are very concerned about the deficits his policies could create. Some industries – particularly people who rely on government contracts or chip production, in addition to initiatives related to environmental protection, education and government services – will likely suffer. Others will benefit. There will be winners and losers under this administration. But especially for my business? It’s a victory.