As with individuals, your small business can benefit from savvy tax planning at the end of the year. Basic strategy: Dig deep in 2025. The One Big Beautiful Bill Act (OBBBA) contains several nuggets for business owners. Of course, every situation is different, but here are seven hidden gems you may discover.
Find year-end bargains. If you're shopping around for new equipment for your business, you might find a good price at the end of the year, especially if tariffs haven't had an adverse effect.
*Strategy: Buy and start using equipment before year-end. If it qualifies for the Section 179 deduction or first-year bonus depreciation, or both, your business may be able to write off all or most of the cost!* The OBBBA permanently allows Section 179 deductions subject to a maximum of $2.5 million with a phase-out threshold of $4 million for tax years beginning in 2025. Plus, the new law permanently restores 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. Tip: A business can claim both Section 179 deductions and first-year bonus depreciation deductions.
Scope out target workers. Frequently, the holiday season is the busiest time of the year for businesses. *Strategy: Hire workers from a designated "target group."* The tax law allows you to claim the Work Opportunity Tax Credit (WOTC) for wages paid to qualified employees. The basic WOTC equals 40% of the first-year wages of up to $6,000 per employee, for a maximum credit amount of $2,400. For disabled veterans, the credit can be claimed for the first $24,000 of wages, for a maximum credit of $9,600.
Inject cash into your company. Does your small business need a cash infusion at year-end? *Strategy: Acquire "qualified small business stock" (QSBS) issued by the company.* If certain requirements are met, you can exclude up to 100% of the taxable gain on a future sale of the QSBS. The OBBBA expanded the tax benefits effective for stock issued after July 4, 2025.
Get in on the cutting edge. In this competitive environment, your business may have to ramp up its research activities. Strategy: Authorize more research and experimentation (R&E) efforts in 2025. The OBBBA restores the prior current write-off for R&E expenses, retroactive to Jan. 1, 2025.
Perform a quick fix. If you get more traffic in your regular workplace, you may need to spruce up the business premises. Strategy: Make any minor repairs that are needed. You can currently deduct minor repairs to a business building, like fixing a leak or replacing a broken window.
Launch a business venture. If you seize the opportunity to fill a business niche, you can take advantage of a special write-off of up to $5,000 for qualified start-up expenses. However, you must legitimately be "open for business" this year to qualify for this tax break on your 2025 return.
Stock up on supplies. As usual, prices are expected to go up next year. Strategy: Buy the supplies you need now. The cost is deductible this year if the purchases qualify as "ordinary and necessary" business expenses.
Need Tax Help?
Contact QTA Consultants for expert tax guidance tailored to your needs.
Related Articles
Business Tax Account Expands to Partnerships & S Corps
The IRS has expanded its online Business Tax Account (BTA) to partnerships and S corporations—letting authorized partners and S corp officers view tax records, make payments, and manage obligations without calling or mailing the IRS.
5 tax perks of hiring your spouse
Short-staffed at work? Hiring your spouse as an official employee opens up retirement contributions, business travel deductions, health insurance savings, education assistance, and group-term life insurance benefits.