Year-End Tax Tips for Businesses & Individuals

by Tené Thomas | Dec 22, 2025 | Tax

As 2025 comes to an end, it’s a good time to take proactive steps for both individuals and businesses to thoroughly assess the effects of recent tax legislation—particularly the comprehensive “One Big Beautiful Bill Act” (OBBBA)—to optimize tax outcomes before filing season begins.

For Individuals

1. Legislative Updates

The “One Big Beautiful Bill Act” (OBBBA), enacted mid‑2025, carries significant new and enhanced provisions for the 2025 tax year:

SALT cap increased to $40,000 for joint filers (phase-out begins at AGI > $500K).
New deductions: $10,000 for U.S.-assembled car loan interest, $25,000 for tip income, $12,500 for overtime pay, and $6,000 senior deduction.

2. Standard vs. Itemized Deductions

Standard deductions for 2025: $15,750 (single), $23,625 (HOH), $31,500 (MFJ).
Revisit itemizing vs. standard deduction with enhanced SALT cap.

3. Optimize Medical & Charitable Deductions

Consider donating appreciated assets for double benefit.
Consider donating directly to a qualified charitable organization all or portion of your RMD. To donate your Required Minimum Distribution (RMD) to charity, use a Qualified Charitable Distribution (QCD) by having your IRA custodian send funds directly to a 501(c)(3) charity, bypassing you, which avoids income tax on the amount. You must be 70½ or older, the gift must go from your IRA to the charity by December 31st, and you’ll report it on Form 1099-R to show it’s excluded from income.

4. Retirement & Income Strategies

Partial Roth conversions may make sense if expecting higher future rates.
Delay income or advance deductions to maximize current-year benefits.
Contribute to your 401(k), IRA, or Roth IRA before the deadline; leverage catch-up rules for ages 60–63.
- Plan for Roth catch-up policy (2026): contributions above threshold will be Roth-only.

5. Required Actions by December 31

Prepay state and property taxes.
Accelerate charitable donations.
Contribute to a charity a portion of or all of your RMD.
Consider partial or complete Roth conversions.
Contribute to IRA or 401(k).
Plan for Roth catch-up policy (2026): contributions above threshold will be Roth-only.
Sell underperforming investments.

For Businesses

1. Accelerate Expenses & Defer Revenue

Delay invoicing until January or prepay expenses like rent, utilities, or subscriptions to reduce 2025 taxable income.

2. Section 179 & Bonus Depreciation

Deduct the full cost of qualifying equipment and software purchased in 2025.
Bonus depreciation is phasing down—check current limits and act before year-end.

3. Review Employee Benefits

Consider year-end bonuses, retirement plan contributions, or fringe benefits.
Ensure compliance with ACA and other reporting requirements.
Offer enhanced retirement contributions (ages 60–63) and adjust plan designs to prepare for the Roth catch-up implementation in 2026.

4. Clean Up Your Books

Reconcile accounts, write off bad debts, and ensure all expenses are properly categorized.

How Can Our Unique Perspectives Assist You?

Tax laws in 2025 introduced changes, including new deductions, retirement options, and rate changes. Acting before December 31, 2025 enables individuals and businesses to leverage these updates effectively and prepare strategically for 2026. We are here to help!

Individual Tax Planning & Compliance

Business Tax Planning & Compliance