As 2025 winds down, you’ll want to consider some tax planning for your business. Here are some ideas to help you prepare for filing your upcoming tax return:

1. Informational returns. Identify all vendors who require a 1099-MISC and a 1099-NEC. Obtain tax identification numbers (TINs) for each of these vendors if you have not already done so.
2. Form 1099-K planning. Consider labeling business and personal accounts separately on platforms like Venmo and PayPal. Mixing funds could cause reporting errors, especially as platforms enhance their 1099-K tracking capabilities.
3. Prepare for overtime and tip headaches. While 2025 is a transition year before the tax-free tip and overtime income must be reported on reformatted W-2s and 1099s, your employees still need to prove their deduction! So be prepared to track both tips and overtime pay from your payroll system.
4. Shifting income and expenses. Consider accelerating income or deferring earnings, based on profit projections.
5. Separation of expenses. Review business accounts to ensure there are no personal expenses. Reimburse the business for any expenses discovered during this review.
6. Create expense reports. Having expense reports with supporting invoices and business credit card statements with corresponding invoices will help substantiate your deductions in the event of an audit.
7. Fixed asset planning. Section 179, or bonus depreciation, is a great planning tool for expensing versus traditional depreciation. If using Section 179, the qualified assets must be placed in service before year-end.
8. Leveraging business meals. Business meals with clients or customers are 50% deductible. Retain the necessary receipts and documentation that note when the meal took place, who attended, and the business purpose on each receipt.
9. Charitable opportunities. Consider any last-minute deductible philanthropic giving, including long-term capital gain stocks.
10. Cell phone record review. Review your telephone records for qualified business use. While expensing a single landline in a home office can be challenging, using a cell phone for business purposes can be deductible.
11. Inventory review. You must also review your inventory for proper counts and remove obsolete or worthless products. Keep track of the obsolete and worthless amounts for a potential deduction.
12. Review your receivables. Focus on collection activities and review your uncollectible accounts for possible write-offs.
13. Review your estimated tax payments. Recap your year-to-date estimated tax payments and compare them to your forecast of full-year earnings. Then make your 2025 4th quarter estimated tax payment by January 15, 2026.