Business Tax Strategies to Implement Before Year-End

6 Moves to Include in Your Year-End Business Tax Planning

The single most important step is running a year-end tax projection with your tax advisor. Without it, you’re making decisions blindly and could miss thousands in tax benefit deductions or face unexpected tax bills. 

Once you know your projected liability, you can time the other five moves below to maximize savings before December 31:

1. Conduct a Year-End Tax Projection

You cannot make smart tax decisions without knowing your projected tax bill. A projection shows where you stand and helps you find hidden liabilities. It also helps identify opportunities while you still have time to act.

Collect your year-to-date P&L, balance sheet, Q4 revenue/expense estimates, fixed asset purchases, and payroll and retirement data.

Once you run a full projection of your tax liability, you should also: 

• Consider the SALT impact. If you’re a pass-through owner in a high-tax state, you may want to revisit SALT workaround strategies under updated rules.
• Review accounting methods. New rules make it worth reassessing cash vs. accrual and other methods.
• Think about section 163(j) interest limitation update. Starting in 2025, interest deductibility switches back to an EBITDA standard. If your business uses debt, this change may increase your allowable interest deductions and should be modeled.

2. Defer Income

Once you know your projected income, you can time your revenue and deductions to create the lowest possible tax bill. If income is high this year, you want to: 

• Accelerate deductions. You could prepay rent, utilities, insurance, or professional fees (if you use the cash method). You can also stock up on supplies or inventory, complete repairs before December 31, and pay year-end bonuses earlier.
• Defer income. This means holding off on invoicing until early January and delaying year-end billing where possible. 

3. Maximize Retirement Contributions

Retirement plans give you some of the largest legal tax deductions available. Here’s what you need to do before December 31: 

• Contribute up to about 20% of net self-employment income to your SEP IRA. 
• Combine employee and employer contributions for a higher total deduction if you have a solo 401(k). 

Also consider asking your CPA to increase contributions now or in early 2025, depending on your projected income and entity structure. 

If you want a second set of eyes on your asset purchases or depreciation strategy, our advisors at The Pun Group can help. We can review your fixed asset schedule and help you find the most tax-efficient approach before December 31.

4. Make Use of Section 179 and Bonus Depreciation

You can now deduct the entire cost of many assets immediately, including equipment, vehicles, software, and certain improvements.

Here’s what you need to do: 

• Buy and place qualifying assets in service before December 31 if you need deductions this year.
• Be mindful of the “binding contract” rule. It says that property acquired under a contract signed before January 19, 2025, may not qualify for the new 100% bonus.
• Conduct a cost segregation study on real estate to see if you can get bonus depreciation on building components.
• Analyze the timing of fixed asset purchases based on your projection.

5. Research Available Tax Credits

After deductions, tax credits give you the largest direct savings. They reduce your tax bill dollar-for-dollar.

There are also other credits like the work opportunity tax credit, employer retention and training incentives, and small employer pension startup credits. 

6. Reconcile, Review, and Update Your Books and Payroll Withholdings

Clean financials create accurate returns, reduce audit risk, and ensure you get every deduction you’re entitled to. Fixing bookkeeping errors in March can cost far more than fixing them now.

Here’s what you need to do: 

• Reconcile bank, credit card, and loan accounts through November 30.
• Correct transaction categories, such as supplies vs. equipment, repairs vs. improvements, etc.
• Write off uncollectible receivables and slow inventory before December 31, because this can reduce your taxable income.
• Review sales tax, payroll filings, and estimated tax payments.
• Schedule a year-end review with your financial advisor. 

Year-End Tax Planning Checklist for Business Owners

Here’s a year-end tax-planning checklist to help you reduce your tax bill:

General Business & Income Tax

• Delay year-end invoices to January 2026 if your tax bracket will stay the same or decrease.
• Prepay Q1 2026 expenses (rent, software, supplies) before December 31.
• Monitor MAGI and keep it below key thresholds to reduce the 3.8% NIIT and qualify for new deductions.
• Review estimated tax payments and adjust withholdings or bonuses to avoid penalties.

Corporate, Retirement & Compensation

• Verify company details (incorporation date, shareholders, share classes).
• Review all deductible expenses (advertising, legal, office supplies, bank fees, payroll).
• Maximize retirement plan contributions to reduce taxable income and MAGI.
• Make catch-up contributions if age 50+ ($7,500 for 401(k), $1,000 for IRAs).
• Consider converting traditional IRAs to Roth for future tax-free growth.
• Review salary vs. dividends strategy with your CPA.
• Finalize year-end bonuses and process them correctly.
• Confirm wage law compliance for all employees, including remote workers.

Business Deductions & Asset Management

• Purchase and place qualifying equipment or software in service before year-end (Section 179 or bonus depreciation).
• Calculate deductible home office expenses (rent, utilities, insurance).
• Review vehicle use; choose between mileage rate vs. actual expense method, and maintain mileage logs.
• Track business vehicle costs (fuel, repairs, insurance, leases, interest).
• Claim R&D tax credits for eligible development or innovation activities.
• Write off obsolete, damaged, or unsellable inventory.
• Harvest tax losses by selling investments at a loss to offset capital gains.

Charitable Giving

• Accelerate 2026 charitable gifts into 2025 to avoid new limits.
• Donate long-term appreciated stock to maximize deductions and avoid capital gains.
• Make a large contribution to a donor-advised fund (DAF) to bunch deductions before the 2026 rules apply.

Compliance & Financial Review

• Reconcile all financial accounts (bank, credit cards, vendors).
• Clean up personal expenses recorded in the business.
• Ensure accurate categorization of all transactions in accounting software.
• Verify employee and contractor information for W-2 and 1099-NEC filing.
• Renew all business licenses, permits, and insurance policies.
• Track all state and federal deadlines for payroll and corporate taxes.
• Review internal controls for expenses, credit cards, and reimbursements.
• Prepare and provide your CPA with a full list of 2025 payments.

How Tax Planning Helps Businesses Improve Cash Flow

Smart tax planning reduces your year-end bill. But it also puts cash where your business needs it most. 

For instance, when you accelerate deductions or delay income, this reduces your current-year taxable income, which means a smaller tax payment in April. You can use that extra cash for business operations, emergency funds, or short-term investments.

You can see similar results with other tax planning strategies, such as:  

• Immediate expensing of large purchases. Using Section 179 or bonus depreciation allows you to deduct the full cost in the year the asset is placed in service. This frees up cash that would otherwise go to taxes.
• Tax credits. These reduce your tax bill dollar-for-dollar. For example, a $10,000 credit means $10,000 more cash available for operations or investments.
• Retirement contributions. While contributing to a retirement plan moves cash out of your business, the deduction lowers your tax burden. This reduces the net cost of contributions. 

Tax planning also means reconciling accounts, writing off bad debt, and reviewing payroll and expenses. The result is a more accurate view of your cash position, clean and accurate books, and more money staying in your business.

If your year-end review feels overwhelming or you’re not sure which tax planning steps apply to your business, contact our advisors. We will walk you through a checklist based on your industry, revenue, and goals. This can help you prioritize what actually moves your tax bill.

How the Pun Group Helps Businesses Plan for Tax Season All Year Long

If tax planning feels reactive or last-minute every year, here are three steps to get ahead of the deadlines and improve your cash flow:

1. Check whether your current tax approach is costing you avoidable dollars. This can help you find missed deductions, overlooked credits, and outdated strategies.
2. Build a year-round tax plan specific to your industry, not a generic checklist. This can give you a clearer picture of upcoming liabilities and savings opportunities.
3. Schedule your tax savings with The Pun Group.

At The Pun Group, we help businesses take control of their taxes all year, not just during filing season. We analyze your filings, outline the steps that can reduce your tax burden, and project the cash flow impact of each move. 

Want predictable tax liabilities, stronger cash flow, and a plan that supports next year’s growth? Book a free consultation today! 

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