A mid-year tax review is all about proactive planning to optimize your tax situation and identify potential savings. With significant tax provisions potentially changing at the end of 2025, reviewing your business’s financials and tax position now is more important than ever. It gives you time to make necessary adjustments, implement strategies to maximize tax deductions and tax credits, and prepare for potential shifts in the tax code.
Proper timely tax planning can reduce your tax liability, help you avoid penalties and stay compliant, improve financial planning and decisions about resource allocation, and alleviate the stress of year-end tax season! Don’t overlook these key items:
- Estimated Taxes and Income Projections:
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- Compare performance against your initial income projections and adjust estimated tax payments accordingly. If income is higher than expected, increase your remaining payments to avoid penalties.
- Maximize Deductions and Credits:
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- Review your expenses to ensure you’re claiming all eligible business deductions, including office supplies, travel, and equipment.
- Research and identify tax credits that may apply to your business, such as the Research and Development Credit or the Work Opportunity Tax Credit.
- Consider Section 179 and Bonus Depreciation which allow businesses to deduct the cost of eligible assets in the year they are placed in service.
- Invest in energy-efficient improvements may qualify for tax credits.
- If you work from a dedicated home office space, see if you meet the requirements for the Home Office Deduction.
- Qualified Business Income (QBI) Deduction:
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- Review your eligibility for the QBI deduction, which allows up to a 20% deduction on qualified business income for eligible individuals. Be aware of limitations based on taxable income and the nature of your business.
- Retirement Plan Contributions:
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- Review your current retirement plan (e.g., 401(k), SEP IRA, etc.) to ensure you’re maximizing your tax-deferred contributions. If you don’t have one, now might be a good time to establish a tax-favored retirement plan.
- Business Structure Review:
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- Consider if your current business structure (e.g., sole proprietorship, Partnership, LLC, S-Corp, C-Corp) is optimal for tax purposes.
Reach out to us: The tax code is complex, so please consult your TFG tax professional while there is time to look for opportunities and navigate tax laws, identify all potential deductions and credits, and still ensure compliance. Call 855-542-7537 or email CPA@fuoco.com.
