Every January, we hear the same thing from new clients: "I wish someone had told me this three months ago."
Tax planning is not a December 30th activity. The best moves require lead time. But even if you are reading this in October or November, there is still time to make a real difference in your 2025 tax bill. Here are seven strategies we walk through with every advisory client this time of year.
1. Max Out Your Retirement Contributions
This is the single biggest lever most business owners have. For 2025, you can contribute up to $23,500 to a 401(k), plus an additional $7,500 if you are over 50. SEP-IRA contributions can reach 25% of net self-employment income, up to $70,000.
One of our clients realized in November that she had only contributed $8,000 to her SEP-IRA. By making a catch-up contribution before year-end, she reduced her taxable income by another $32,000. At her tax bracket, that saved her roughly $8,000 in taxes.
2. Accelerate Deductions
If you expect a higher income this year than next, consider pulling some 2026 expenses into 2025. Prepay your January rent. Pay Q1 estimated state taxes early. Renew annual subscriptions before December 31st.
3. Defer Income When It Makes Sense
Self-employed and expecting a lower-income year ahead? Consider pushing some December invoicing into January. But be honest about the math. Deferring income only helps if your tax bracket will actually be lower next year.
4. Harvest Investment Losses
If you hold investments that are underwater, selling them before year-end lets you use those losses to offset capital gains or up to $3,000 of ordinary income. Just watch the wash sale rule, which prevents you from buying back substantially the same investment within 30 days.
5. Make Charitable Contributions Count
If you are 70 and a half or older, you can donate up to $105,000 directly from your IRA to qualified charities. This counts toward your required minimum distribution without increasing your taxable income. It is one of the most tax-efficient ways to give.
6. Revisit Your Entity Structure
This one takes planning, but it is worth mentioning. If your LLC is generating consistent profits above $50,000, electing S-Corp status could save you significant self-employment taxes. The deadline to elect for 2026 is March 15th, but the analysis should start now.
7. Buy Equipment You Actually Need
Section 179 lets you deduct the full purchase price of qualifying equipment in the year you buy it, up to $1,220,000. If you have been putting off that new truck, computer system, or equipment purchase, buying before December 31st could make a real dent in your tax bill.
The Real Takeaway
Tax planning is not about tricks or loopholes. It is about making intentional decisions with your money before the calendar forces your hand. Every dollar saved on taxes is a dollar that stays in your business.
If you are reading this and thinking "I should probably talk to someone about this," trust that instinct. That is exactly what we are here for.