With new tax laws kicking in during 2025, smart year‑end planning can significantly reduce your tax burden, boost cash flow, and set you up for success in the next fiscal year.
- Reconcile Accounts
Begin by reconciling bank accounts, credit cards, and payment processors to ensure accurate records. Catching discrepancies now speeds up closing and reduces audit risk.
- Pull Updated Financials
Run your Profit & Loss, Balance Sheet, and Cash Flow reports. Look for:
- Unexpected variance in revenue or expenses
- Aging receivables/payables
- Inventory mismatches
These insights help inform decisions before the year closes.
- Review Key 2025 Tax Law Changes
Be aware of major updates enacted under the “One Big Beautiful Bill” law signed in mid‑2025:
- 100% Bonus Depreciation resumes for qualifying assets placed in service after January 19, 2025
- Section 179 Deduction increases—businesses can deduct up to $1.3–$2 million, depending on threshold rules
- Qualified Business Income (QBI Deduction) remains available (20%), with phase-outs beginning at $182,100 for singles and $364,200 for joint filers
- State and Local Tax (SALT) deduction cap raised to $40,000 through 2029 for those earning under $500,000
- Expanded Small Business Stock Benefits: QSBS thresholds raised to $75M, with partial/full capital gains exclusion after 3–5 years
- Plan Strategic Capital Purchases
If you’re considering buying equipment, software, machinery—or even making R&D investments—fall 2025 may be the ideal time:
- Leverage restored 100% bonus depreciation and expanded Section 179 limits for large write-offs this tax year
- Check if domestic R&D expenses qualify for immediate expensing under new proposals
- Consult a Tax Professional
An early discussion with your accountant or fractional CFO can identify opportunities such as:
- Maximizing QBI deduction and SALT strategies
- Proper classification of contractors (e.g., thresholds for 1099s)
- Structuring retirement contributions through Solo 401(k) or SEP IRA—allowing up to ~$69,000 annually 6. Organize Tax Documents
- Begin gathering:
- Financial statements and reconciliations
- Receipts for capital expenditures and operational costs
- W‑2s, 1099s, payroll, and contractor info
- Records related to clean energy credits, R&D expenses, QSBS sales plans, etc.
- Set 2026 Goals, Budget, and Cash Flow Forecasts
Use your 2025 data to map out revenue targets, expenses, and investments for the coming year. Incorporate new tax regimes into your model, like reduced payroll taxes if shifting to S‑Corp status or predicted RALI credits.
- Stay Compliant on Reporting Updates
For 2025, the IRS has added stricter rules for:
- Digital payments and crypto transaction reporting
- Tip and overtime income submission thresholds (especially with new deductions up to $25K in tips/$12.5K in overtime for certain employers)
Key Year‑End Checklist
Task | Why It Matters |
Reconcile accounts | Ensures accuracy & avoids audit issues |
Review/plan depreciation & Section 179 | Maximize deductions for capital spending. |
Consult tax advisor early | Unlock structure and deduction strategies. |
Improve record‑keeping | Supports digital & crypto compliance |
Organize documentation | Prepares for seamless tax season |
Budget & forecast for 2026 | Aligns financial strategy with new laws |
Final Thoughts
Year-end planning in 2025 isn’t just about closing books—it’s about capitalizing on new tax law advantages, investing in growth, and preparing for what’s ahead. Ensuring strong financial discipline now will drive smoother operations and more tax-efficient results in the new year.