As the tax deadline approaches, many business owners find themselves scrambling to make sure everything is in order. While last-minute tax planning isn’t ideal, there are still meaningful steps you can take to reduce your tax burden, avoid penalties, and start the new year on solid financial footing. These essential tax tips for businesses can help you make the most of the final days before filing.
Essential Tax Tips For Businesses
While year-round tax planning typically produce the best results, you still have time to take advantage of several benefits to lower your 2025 taxes. You should consider the following six.
1. Maximize Deductions
Many businesses miss out on deductions simply because they don’t realize they qualify. Commonly overlooked deductions include:
- Home office expenses
- Business mileage and vehicle use
- Software subscriptions and online tools
- Marketing, website, and advertising costs
- Professional services such as legal or accounting fees
Review your expenses carefully and confirm that all legitimate business costs are included. One of the most important essential tax tips for businesses is to never leave deductions unclaimed.
2. Quality for the Pass-Through Deduction
If you’re looking for top essential tax tips for businesses, this one should definitely be at the top of your list. Sole proprietorship or pass-through entity businesses may be able to deduct up to 20% of qualified business income (QBI). But if your 2025 taxable income exceeds $197,300 ($394,600 for married couples filing jointly), certain limitations kick in that can reduce or even eliminate the deduction. One way to avoid these limitations is to reduce your income below the threshold — for example, by having your business increase its retirement plan contributions.
3. Delay Invoicing
If your business uses the cash method of accounting and it would benefit from deferring 2025 income to 2026, wait until early January 2026 to send invoices.
4. Buy Equipment
One of the most valuable essential tax tips for businesses is making use of new tax laws. For example, you can take advantage of 100% bonus depreciation and Section 179 expensing to deduct the full cost of qualifying equipment or other fixed assets. Under the One Big Beautiful Bill Act, 100% bonus depreciation is back for assets acquired and placed in service after January 19, 2025. And the Sec. 179 expensing limit has doubled, to $2.5 million for 2025. But don’t forget though that the assets must have been placed in service by December 31, 2025 for you to claim these breaks on your 2025 return.
5. Contribute to Retirement Plans
If you’re self-employed or own a small business, contributing to a retirement plan such as a SEP IRA, SIMPLE IRA, or Solo 401(k) can significantly reduce taxable income. In many cases, contributions can be made up until the tax filing deadline! Not only does this lower your current tax liability, but it also helps build long-term financial security for you and your employees.
6. Use Credit Cards
If you need to buy equipment or prepay expenses before the year ends, you can do so without using cash. Use your business credit card instead. In most cases, expenses paid by credit card are deductible when charged, even if you don’t pay the credit card bill until the next year. While you may have missed out on this tax tip for 2026 filing, you can take advantage of it for 2027 filing.
Final Thoughts
Although most of the strategies noted above are subject to various restrictions and limitations beyond what we’ve covered here, they’re definitely worth looking into. But please consult with us at The Ray Group before implementing them. We can also offer more ideas for reducing your taxes. In the meantime, keep these essential tax tips for businesses in mind not only during tax season, but year-round to stay financially prepared.
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