How 2025 Tax Law Changes Impact Maryland Small Businesses & Startups

Running a Maryland business is already challenging — and the 2025 tax landscape adds new layers. At Yabi Tax and Accounting, we help small and foreign-owned businesses navigate these shifts confidently. 

Key 2025 Updates

1. Pass-Through Entity (PTE) Adjustments: Starting 2026, Maryland will calculate distributive income differently for residents, potentially increasing taxable income.
2. Phase-Out of Itemized Deductions: Business owners with AGI above $200,000 may lose some deductions.
3. Digital Service Tax Expansion: Online and SaaS businesses could be newly taxable. For New and Foreign-Owned Businesses 
4. Many of Yabi’s clients are new Maryland startups or foreign-owned companies forming their first U.S. entity. These new rules can be confusing — especially for non-resident owners who must manage:
5. Sales & use tax regidtration

• EIN setup and Maryland Business Charter filing
• Payroll, unemployment and withholding registration

Yabi Tip: We handle full business formation, accounting, and ongoing compliance for both local and foreign investors — so you can focus on growth, not paperwork.

Planning Steps

1. Review your 2024–2025 financials now. 
2. Check whether your services fall under Maryland’s new taxable codes.
3. Update pricing or contracts before 2026 to manage cash flow.
4. Book a free consultation with Yabi Tax and Accounting.