As 2025 comes to a close, many business owners are focused on ending the year strong, but it's also the time to think strategically about taxes. New tax legislation passed this summer makes your year-end decisions even more crucial to your bottom line.
Here are some key strategies to help you retain more of what you earn and set your business up for long-term success.
Planning in a Post-OBBBA Landscape
With the passage of the One Big Beautiful Bill Act (OBBBA), business owners now face a more stable and predictable tax climate compared to the uncertainty surrounding the Tax Cuts and Jobs Act of 2017 (TCJA), which was previously set to expire at the end of this year.
Key items, such as the Qualified Business Income (QBI) deduction for pass-through entities, have been made permanent, allowing S corporations, partnerships, and LLCs to keep benefiting from the 20% deduction. Likewise, the federal estate and gift tax exemption will be increased to $15 million beginning in 20261, giving business owners more flexibility in succession and estate planning.
While many previous planning pressures related to TCJA expirations are eased, business owners can now make strategic decisions confidently, aligning operational, investment, and succession strategies with the new permanent framework.
Accelerate or Defer Income Strategically
Depending on your situation, it might be wise to accelerate income into 2025 to secure lower rates or postpone income to 2026 if you expect to be in a lower tax bracket next year.
A reliable financial advisor can assist you in modeling various scenarios, considering your business cash flow, future objectives, and possible tax law changes.
Maximize Section 179 and Bonus Depreciation
If you’re thinking about new equipment, vehicles, or technology upgrades, you might be able to fully deduct those expenses this year through Section 179 or bonus depreciation. Keep in mind that bonus depreciation is gradually decreasing—it’s 40% this year and will drop to 20% in 2026—so acting sooner could lead to a larger deduction.
Fund a Retirement Plan for You and Your Employees
Contributing to a SEP IRA, SIMPLE IRA, or Solo 401(k) not only helps you prepare for retirement but also can lower your taxable income. Business owners looking to keep top talent can also explore employer-sponsored plans with tax advantages for both the business and employees. We explore retirement plan options more in our blog.
Consider a Cash Balance Plan
For high-earning business owners, a cash balance plan can be a powerful way to shelter more income and increase retirement savings. These plans allow for much higher contribution limits than 401(k)s, especially valuable as you approach retirement or expect a higher income in the coming years.
Review Your Entity Structure
If your business has expanded or experienced major changes, it might be time to reevaluate your entity type. The appropriate structure can lower self-employment taxes, improve liability protection, and maximize your tax results under current and future laws.
Don’t Overlook State-Level Opportunities
Louisiana provides several state-specific credits and incentives, including job creation, investment credits, and research and development programs. At Kore Financial Group, we collaborate with Kolder, Slaven & Co. to thoroughly understand the tax environment, which can help you identify opportunities that are often overlooked.
In short, 2025 is a crucial year for tax planning. Working with a tax-savvy financial advisor helps you not just react to tax changes but stay ahead of them. Contact us to see if you should take advantage of certain tax strategies before the end of the year and into 2026.
1. IRS.gov