As summer fades and the fourth quarter approaches, it’s the perfect time for small business owners to assess their tax standing. September, in particular, offers a crucial “reset” month. By proactively reviewing your taxable activities and implementing strategic planning now, you can significantly reduce your 2025 tax bill and prepare for a smoother tax season ahead.
At Lightening the Load, we believe that consistent tax readiness is key to a thriving business. This blog post guides small business owners through essential tax moves to make before year-end.
September: Your Tax Planning Reset Month
Use September as your checkpoint to review your business’s year-to-date tax picture.
- Review Year-to-Date Taxable Income and Deductible Expenses:
- Examine your records from January through August. Are all your taxable income amounts properly recorded?
- Have you tracked all your deductible expenses meticulously? This review helps you understand your current tax position.
- Adjust Estimated Tax Payments (Q3 Deadline: September 15, 2025):
- Based on your review of taxable income, is your third-quarter estimated tax payment (due September 15th) accurate?
- If your business’s taxable income has increased or decreased significantly this year, adjust your upcoming payments to avoid potential underpayment penalties or a surprisingly large tax bill.
Smart Tax Strategies to Implement Before Year-End
The remaining months of the year offer prime opportunities for strategic tax moves:
- Accelerate Deductions:
- Prepaid Expenses: If you have business expenses (like subscriptions, insurance premiums, or rent) due early next year, consider paying them in 2025 if it allows for a deduction in the current tax year.
- Equipment Purchases (Section 179 & Bonus Depreciation): If you plan to purchase qualifying business equipment, doing so and placing it in service before December 31st, 2025, can allow you to claim significant deductions (like Section 179 expensing or bonus depreciation) against your 2025 taxable income. For 2025, bonus depreciation is at 40%.
- Defer Taxable Income:
- If you anticipate lower taxable income in 2026, or if you expect to be in a lower tax bracket, consider delaying billing for services or product deliveries until early 2026. This can push the recognition of taxable income into the next tax year.
- Maximize Retirement Contributions (Tax-Deductible):
- As a small business owner, contributions to qualified retirement plans (like SEP IRAs or Solo 401(k)s) are often tax-deductible. Making these contributions before year-end can reduce your 2025 taxable income.
- Utilize Available Tax Credits:
- Review federal and state tax credits your business might qualify for. Examples include credits for research and development (R&D) or the Work Opportunity Tax Credit (WOTC) for hiring individuals from certain groups. Ensure you have all necessary documentation to support these claims.
- Clean Up Bad Debts:
- If your business has uncollectible receivables, you may be able to deduct them as business bad debts, reducing your taxable income.
Why Proactive Planning Matters
Waiting until spring 2026 to think about your 2025 taxes means missed opportunities. By taking proactive steps in the fall, you gain:
- Reduced Tax Liability: Legally lower the amount of tax your business owes.
- Avoid Penalties: Proper estimated tax payments prevent underpayment penalties.
- Greater Control: Make informed decisions about your business’s tax position.
Partner with a Tax Professional Before Year-End
The most effective way to ensure you’re making all the right tax moves is to consult with a qualified tax professional. They can help you project your year-end taxable income, identify specific deductions and credits applicable to your business, and strategize for optimal tax outcomes.
At Lightening the Load, we’re here to support your small business with expert tax advice and personalized solutions. Let us help you fall into tax readiness and minimize your 2025 tax bill.
Let us lighten your load.
