Don’t wait until tax season — now’s the time to take action.
As we approach the end of 2025, it’s time to focus on strategic moves that can reduce your business’s tax liability. Here are the top tax planning strategies to consider before December 31:
Take Advantage of Section 179 & Bonus Depreciation
If you’ve been considering purchasing equipment, software, or machinery, now may be the time to buy.
Under Section 179, businesses can deduct the full cost of qualifying assets in the year purchased (up to the annual limit).
Bonus depreciation has been restored and expanding with OBBBA. The OBBBA permanently reinstated 100% bonus depreciation for most qualified property acquired after Jan. 19, 2025
Some qualified assets include office furniture, computers, vehicles, business equipment, and more.
Max Out Retirement Contributions
Contributing to a SEP IRA, SIMPLE IRA, or solo 401(k) can significantly reduce your taxable income — and help you build future wealth.
Some plans need to be set up by year-end, so don’t wait.
Friendly Reminder: Employer contributions may be made up until your tax filing deadline (including extensions), but the plan must be established in 2025.
Review Your Payroll and Bonuses
If you are considering employee bonuses or owner’s compensation paying them in Q4 can lower your business income for 2025.
This is a perfect time to confirm:
- Payroll taxes are paid and filed correctly
- You’re in compliance with year-end reporting obligations
Friendly Reminder: Bonuses must be processed in time for inclusion in W-2s.
Clean Up Your Books
This is your last chance to catch up on reconciliations and fix errors. Don’t overlook:
- Unreconciled bank/credit card accounts
- Misclassified expenses
- Old A/R or A/P balances that need write-offs
Evaluate Your Entity Structure
If your business has grown this year, it might be time to review your entity choice.
For example, switching from an LLC to an S-Corp could offer tax savings through payroll structuring. But the window to make that election for 2026 starts January 1 — and you’ll want to plan ahead.
Prepare for 1099 Filing
If you paid contractors, freelancers, or self-employed individuals $600 or more during 2025, you’re likely required to file Form 1099-NEC by January 31, 2026.
Now’s the time to:
- Collect/update W-9s
- Review payments made via check, ACH, or direct deposit (not credit cards)
To note: If 1099s are not filed there could be penalties associated with them.
We’re offering year-end strategy sessions through December 31 to help you:
- Analyze your tax position
- Identify opportunities to reduce your liability
- Create a plan for filing season
Need help implementing these strategies or running the numbers? We’re here to help. Contact us!