As the year comes to a close, November and December are the most important months for tax planning.
You still have enough time to make strategic financial moves — and you now have a clear picture of what your income and deductions look like for 2025.
Here are 10 smart year-end tax strategies to help business owners reduce tax liability, stay compliant, and enter 2026 financially prepared.
Business owners with access to workplace retirement plans may still have time to increase contributions before December 31.
Higher contributions can:
Even small increases in November and December can make an impact.
For high-income earners with a workplace 401(k) that allows after-tax contributions:
You may be able to contribute beyond the standard limit and then roll those funds into a Roth account — allowing for tax-free growth in the future.
This strategy only works if your plan permits after-tax contributions and in-service rollovers.
If your income is too high for a direct Roth IRA contribution, a Backdoor Roth may be an option.
It involves:
Important:
This strategy generally works best when you have no balance in Traditional, SEP, SIMPLE, or rollover IRAs by December 31, or the conversion may become taxable.
If you’re planning to donate before year-end, consider gifting appreciated stock instead of cash.
Benefits include:
This can be more tax-efficient than donating cash alone.
If you have investments showing a loss, selling them before year-end can help:
Just remember the wash sale rule — you cannot buy the same or “substantially identical” security within 30 days before or after the sale, or the loss won’t count.
If your taxable income falls within the 0% long-term capital gains bracket, you may be able to:
This strategy works best when no state capital gains tax applies.
Health Savings Accounts offer triple tax benefits:
Many business owners use HSAs to plan for future healthcare costs while reducing current-year taxable income.
Your business structure can significantly affect taxes — especially if profits are increasing.
For business owners with net income above $100,000, electing S-Corporation status may:
However, S-Corps also include payroll and compliance requirements, so analysis is essential before making a change.
Many small business owners overpay taxes simply because expenses are not properly recorded.
Commonly missed deductions include:
Keeping clean books throughout the year — not just at tax time — helps avoid missed deductions and inaccurate quarterly estimates.
In 2025, individuals can gift up to $19,000 per person ($38,000 for married couples) without affecting lifetime estate exemptions.
While this does not reduce current income taxes, it can support long-term wealth-transfer planning — especially for individuals in states with low estate thresholds.
Year-end is the best time to:
At Freedom From Accounting, we help business owners stay ahead — not overwhelmed.
Schedule your consultation now and we’ll help you:
✅ Review your 2025 projections
✅ Identify tax-saving opportunities
✅ Avoid costly last-minute mistakes
✅ Start 2026 financially confident
