Sandra Vasquez

As we approach the end of 2025, we want to remind you of a few important planning strategies that can save you time, money, and stress during tax preparation. 

Small businesses like Partnerships and S-Corps

How is your business doing so far? Has your revenue increased compared to previous years? Are you in need to purchase equipment? How about growing your business and hiring new or additional employees?  All these and more concerns can be addressed individually, and we can help you tailor the best strategy that aligns to your goals. However, here are some things to consider:

•  Retirement accounts and contributions - allow you as the business owner and your employees if applicable, a reduction in taxable income, offer tax-deferred growth for employees, increase employee retention and improve competitiveness of your business. 

• Fringe Benefits – If you have the cash flow, fringe benefits like health insurance, educational assistance, HSA, FSA accounts, and cafeteria plans are tax-deductible and can add value to you and your employees. 

• Generational business owners who are looking to retire and pass the business to their family relatives can benefit from installment sales. 

• Capital Investments can use bonus depreciation up to 100% in 2025, section 179 expense, or Modified Accelerated Cost Recovery System (MACRS), or a combination of all these depreciation methods. A quick analysis of the current year business performance and a careful forecast for the following years is recommended to make the best tax planning decision. 

• Entity Structure Optimization –  A single member LLC may elect to be taxed as an S-Corp in order to save in self-employment taxes. A late election is available, but payroll taxes need to be considered and paid accordingly. 

Individuals, landlords (Sch E), and disregarding entities (Sch C) 

• Marriage, divorce, and the death of a spouse each have important tax implications. Professional tax guidance is recommended during these life changes. 

• Is your state tax liability too high? Consider the increase in SALT deduction. For 2025 you can deduct up to $40K in state taxes. The income limit phaseout is $500K for Married Filing Jointly and remains at $10K if the AGI exceeds $600K. 

• Healthcare is another planning opportunity for individuals.

  1. Are you eligible for HSA account?

  2. Are you approaching Medicare benefits age? 

  3. Did you know that your income from the previous two years is used to determine current Medicare premiums?  Deferring income may be a great planning tool to consider. 

• Early retirement withdrawals- While life happens and sometimes taking money early from your retirement accounts is necessary, you can plan your distributions or Roth IRA rollovers. 

• 529 accounts and contributions- Offer a state-level deduction and are a great way to pay for higher education for your children or grandchildren. 

• Selling Real estate – Knowing when is the best time to sell and how it will affect your overall income is a great opportunity to plan for large capital gains deferrals. 

• RMDs- If you are 70½ years or older and your income tax bracket is high, Qualified Charitable Distributions (QCDs) are a great way to reduce your taxable income and tax liability. You can contribute up to $108K for 2025. 

• Tax loss harvesting- Unrealized losses in investments can offset gains from real estate transactions. Your financial advisor can help with this process, so you can “harvest the loss”. 

• Energy credits- These credits are ending in 2025. If you are still considering energy efficient improvements or new construction in your primary residence, that needs to be completed by the end of the year to qualify for them. The amounts are up to $3,200 for home improvement credit, and include insulation, windows, doors, and heating and cooling systems improvements made through 12/31/2025. 

• Residential clean energy credit- Another expiring credit for improvements or new construction for your main home, includes solar panels, wind turbines, geothermal heat pumps and battery storage systems and must be completed by December 31, 2025. 

• Child Tax Credit – The Child Tax Credit amount for 2025 has been increased by the One Beautiful Bill to $2200 per child. However, it is reduced to $500 if the child turns 17 by the end of the year. 

Let’s be proactive with planning before the end of the year and allow us to help you navigate the tax world the most effective way.