2025 Year-End Tax Planning Guide

November 2025 • Your 2025 Year-End Tax Planning Guide

As we approach the end of 2025, there’s still time to take action and make a real difference in your tax outcome for the year. With thoughtful planning and a few strategic steps, you can reduce your tax bill, strengthen your retirement savings, and position your finances for a better 2026.

Below are some year-end moves to consider before December 31. Each one is practical, IRS-approved, and designed to help you keep more of what you’ve earned.

1. Strengthen Your Business Deductions before December 31

• Prepay Expenses Under the IRS Safe Harbor — Prepay up to 12 months of qualifying expenses like rent or insurance to deduct them this year.

• Hold Off on Year-End Billing — Delay invoicing clients until January to shift income into 2026.

• Purchase Needed Equipment — Deduct through bonus depreciation or Section 179 if placed in service by year-end.

• Use Business Credit Cards Wisely — Deductions occur at the charge date for cash-basis taxpayers.

• Document Every Legitimate Deduction — Maintain records to substantiate your deductions.

• Review Qualified Improvement Property — Improvements to commercial interiors may be eligible for immediate expensing.

2. Take Full Advantage of Retirement Savings Opportunities

Retirement plans remain one of the most powerful tax-saving tools available to small-business owners and self-employed professionals.

• Establish or Fund a Retirement Plan Before Year-End — Set up a Solo 401(k) or SEP IRA to maximize deductions and savings.

• Use Available Tax Credits — New plan start-up credits and automatic-enrollment incentives can reduce taxes owed.

• Consider a Roth Conversion — Convert during a lower-income year for future tax-free withdrawals.

3. Use Vehicle Deductions to Your Advantage

• Heavy SUVs, Pickups, and Vans — May qualify for 100% bonus depreciation or Section 179 expensing.

• Standard-Weight Vehicles — Limited to $20,200 in first-year depreciation.

• Act Before Year-End — Vehicle must be owned and used for business before December 31.

4. Plan for Crypto Profits and Losses

• Harvest Gains or Losses — Strategically realize gains or losses before year-end.

• No Wash-Sale Restrictions — You can rebuy crypto immediately after selling for a loss.

• Donate or Gift Crypto — Enjoy tax benefits by donating to charity or gifting to family members.

5. Don’t Overlook Deductions Hidden in Your Current Vehicles

Review older or personal vehicles for possible business-use deductions or loss opportunities before year-end.

6. Review Your Stock Portfolio for Tax Efficiency

• Offset Gains with Losses — Match gains and losses for maximum tax efficiency.

• Donate Appreciated Stock — Avoid capital gains and get a charitable deduction.

7. Review Your Health Care Reimbursement Options

• Section 105 HRA — Complete reimbursements before year-end.

• QSEHRA or ICHRA — Reimburse premiums tax-free depending on business size.

• S Corporation Owners — Ensure premiums are reported properly for deductions.

8. Make Smart, Family-Focused Tax Moves

• Put Your Children on Payroll — Deduct wages and teach them savings habits via Roth IRA contributions.

• Consider Marriage or Divorce Timing — Filing status as of December 31 applies for the full year.

• Use 0% Capital-Gains Bracket for Family Gifts — Gift appreciated assets to lower-income relatives.

9. Make the Most of the Section 199A Deduction

The 20% deduction on qualified business income remains one of the most valuable breaks for pass-through entities.

10. Review Your Year-End Tax Checklist

• Prepay next year’s expenses

• Delay billing until January

• Fund retirement plans

• Purchase and place equipment or vehicles in service

• Manage crypto and stock portfolios

• Pay children for work performed

• Confirm Section 199A eligibility

Each of these moves can help reduce your 2025 tax liability and improve your long-term financial position.

Schedule Your Year-End Tax Planning Session

© 2025 Tandy Consulting Inc. • www.tandyconsulting.com