Lucier CPA can help you with all of your end of year tax needs.
With the year winding down amid holiday chaos and family commitments, tax preparation likely isn’t at the top of your to-do list. However, taking strategic action now can make 2026 significantly easier financially. Here are some strategies business owners can implement to lower their tax burden or better prepare for what they’ll need to pay.
Get Your Financial Records in Order
Disorganized or incomplete financial documentation puts you at an immediate disadvantage. Take time to compile all income and expenses from the current year, tracking down any missing documentation like receipts and invoices. Ensure your accounting records are complete and accurate. Collaboration with Lucier CPA, Inc. throughout the year makes year-end much less overwhelming.
Purchase Required Business Equipment
Planning to buy business tools, technology, or equipment? Do it before the year ends. Equipment bought and operational by December 31, 2025 qualifies for depreciation on this year’s return.
Address Outstanding Invoices
Take action on unpaid customer invoices. For businesses using accrual accounting, these receivables are considered taxable income even if uncollected. Follow up on overdue accounts, write off debts you’ll never recover, and consider collection services for significantly aged balances. This prevents you from being taxed on money you haven’t actually received.
Complete Planned Charitable Giving
The holiday season offers both goodwill opportunities and tax advantages. Charitable gifts, whether monetary or donated items, can be deducted. Complete all donations before year-end, obtain proper documentation, and determine fair market value for donated goods.
Boost Retirement Account Contributions
If you maintain a retirement plan, maximize your contributions before year-end. These contributions lower your taxable income while building future wealth. Max out contributions to your 401(k), SEP IRA, or SIMPLE IRA, these might allow contributions up to 25% of compensation. If you don’t have a plan established, use this time to explore options for next year.
Claim Home Office Deductions
Business owners working from home may qualify for home office deductions if a specific area is used regularly and exclusively for business purposes. You can deduct proportionate amounts of mortgage interest, utilities, insurance, and maintenance costs. Alternatively, use the streamlined method, $5 per square foot for up to 300 square feet.
Make Estimated Tax Payments
If you anticipate owing taxes, don’t delay until the April deadline. Submitting your fourth estimated payment by January 15th helps avoid underpayment penalties. Calculate your expected liability based on 2025 income.
While taxes aren’t exactly exciting, smart planning delivers real financial benefits. At Lucier CPA, Inc. we work on your tax preparation so you can concentrate on growing your business instead of worrying about tax complications
Lucier CPA, Inc. 1300 Division St, West Warwick, RI 02893Â (401) 946-1900