Stay Ahead in 2025: Pro Tax Tips for Business Owners
Attention business owners! As you plan for 2025, having a strong tax strategy can make a big difference in your bottom line. Here are our top tax tips for 2025 to help you maximize your savings and set your business up for continued success.
1 - Take Advantage of Bonus Depreciation Before It’s Gone
With bonus depreciation set at 40% in 2025, now is the time to make those big purchases! This benefit will continue to decline in 2026 and will completely phase out in 2027. If you’re planning on buying equipment or upgrading your facilities, act this year to maximize your write-offs and save on your taxes. It’s all about using what’s available to keep your business thriving and your cash flow strong. Grab that extra deduction while it is available!
2 - Maximize Section 179 Expensing for Big Wins
Section 179 is a game-changer for small and mid-sized businesses. This deduction allows you to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year, rather than depreciating over time. You can deduct up to $1,250,000 in eligible purchases in 2025 but plan carefully to stay within the threshold and maximize your deduction.
3 - Strategically Plan Retirement Contributions
A solid retirement plan benefits both your future and your business today. Maximizing contributions to SEP IRAs or 401(k)s can help you secure your financial future while reducing your taxable income. Take time to review the contribution limits for your plan and evaluate whether it aligns with your long-term financial goals and offers optimal tax advantages. Planning now can set you up for immediate tax savings and a more secure future.
4 - Reevaluate Your Entity Type
As your business evolves, your current structure may no longer align with your goals or provide the most tax efficiency. Whether you operate as an LLC, S-Corp, or partnership, it could be worth exploring whether a restructuring might help reduce your tax burden and enhance profitability. Consulting with a trusted advisor can provide clarity and guidance as you navigate this decision.
5 - Conduct a Comprehensive Expense Audit
Regularly reviewing your business expenses can uncover inefficiencies and potential savings. Consider the following actions:
Evaluate Recurring Costs: Scrutinize ongoing expenses such as subscriptions, service contracts, and utility bills to identify areas where costs can be reduced.
Renegotiate Supplier Agreements: Engage with suppliers to negotiate better terms or discounts, especially if you've established a long-term relationship.
Eliminate Redundant Services: Identify and discontinue services or products that no longer add value to your operations.
By proactively managing your expenses, you can improve your bottom line and ensure that your resources are allocated effectively.
At The Purple Group, we’re committed to helping you navigate the complexities of tax planning, so you can focus on growing your business and enjoying the process. Taxes don’t have to be stressful, and we’re here to make sure you’re always ready to take advantage of every opportunity. Ready to plan for success in 2025? Let’s connect and make it happen!
