What Your CPA Wants You to Know

110. Ten Year-End Tax Moves to Cut Your 2025 Tax Bill for Business Owners

• Carson Sands, CPA & Teran Sands, MBA. • Episode 110

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We share ten year-end tax moves that actually save money when done before December 31, from bonus depreciation and retirement setup to the Augusta rule, income timing, and a no-drama plan to clean up your books. The focus stays on practical steps, clear timing, and spending only where it helps growth.

• sending client gifts within deductibility limits to strengthen loyalty
• timing equipment and vehicle purchases for 100 percent bonus depreciation
• using year-end bonuses with clear metrics and expectations
• setting up employer retirement plans before year-end even if funding later
• applying the Augusta rule for tax-free home rental to your business
• deferring income by timing invoices for cash-basis taxpayers
• making charitable gifts or using donor-advised funds for flexibility
• capturing mileage and home office deductions with clean records
• cleaning and reconciling books to avoid duplicate income
• scheduling a tax projection to choose the best moves now

Our clients love this plan. It's perfect if you're doing your own books, but want an expert watching over your shoulder and training you on everything you need to do. We have all the fine details in episodes 101 and 102 of this podcast if you want to check it out, or just email us at Carson at Sansco.net.


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SPEAKER_00:

Do not wait until the year has ended to do all of these things because a lot of these you can't take advantage of if you don't do them now.

SPEAKER_02:

Welcome to What Your CPA Wants You to Know.

SPEAKER_00:

Tax and accounting help can be expensive, so we've created this podcast to help guide you through it all and make you feel like you have a CPA in your back pocket.

SPEAKER_02:

I'm Carson Sands.

SPEAKER_00:

And I'm Taryn Sands.

SPEAKER_02:

I'm a CPA with over 10 years of experience helping people start and grow their businesses.

SPEAKER_00:

And I'm an MBA with a specialization in marketing and entrepreneurship. Taxes suck, and we want to make sure you don't pay more than your fair share.

SPEAKER_02:

We're here to share everything your CPA wants you to know.

SPEAKER_00:

In a fun and easy to understand way.

SPEAKER_02:

Let's get started.

SPEAKER_00:

Let's do it. So we are getting prepared to wrap up 2025, which is crazy. But we are gonna go through 10 quick things today that you can do before the year ends that will save you money on your tax return when you file it in 2026. Because, like we said last episode, you have to be proactive with these things. So now is the time to do it.

SPEAKER_02:

And not all of these will apply to every single business, obviously, but I would guarantee you that every single business could benefit from at least five of these.

SPEAKER_00:

Absolutely. These are very common ones. Hopefully you've heard of these. If not, I'm so glad that you're listening to this. But we're gonna try to go through this rapid fire because there's a lot of these that we have like individual episodes on. So if you needed more information, you could just go back and listen to the whole episode. But for now, we're just gonna make sure that we run through these. So if you are getting organized, wrapping up the year, which you should be doing, then you can make sure that you're implementing all of these that apply to you.

SPEAKER_02:

Number one, Christmas gifts or thank you gifts. I mean, it's the end of the year or whatever holiday you celebrate, they all seem to fall at the end of the year, which is convenient, but they're tax deductible up to a certain amount, and it's a great time of year to send them. It's good advertising and it's a good deduction.

SPEAKER_00:

And my dad used to do this every single year growing up. I was raised by entrepreneurs and my grandma was like very adamant about giving all of their big clients Christmas gifts. And I have only received a Christmas gift maybe one or two times from someone, but I guarantee you that it sticks in your mind. So if you are trying to think of ways to bring down your profit for the year and you want to spend a little extra money, it helps you save money in taxes, but also it's really, really great for your relationship with your customers or clients, and it just helps you stick out, you know?

SPEAKER_02:

It does. I have a client that has bought me several bottles of whiskey as a gift, and he became one of my best friends.

SPEAKER_00:

So definitely not the whiskey, but maybe it was.

SPEAKER_02:

It could have been. I don't know if he wanted to be my best friend, but he he has to be now.

SPEAKER_00:

So all right. Number two is to buy equipment or assets. Now, people generally know this one. People are rushing to make their purchases before December 31st, but really now is the time to sit down and review everything. And if you do need to make a good purchase, make sure that you're timing it properly.

SPEAKER_02:

The depreciation rules are really good this year. They went back to 100% bonus depreciation for any assets purchased after January 19th. So you really are going to get a great deduction for any of those large asset purchases that you do this year.

SPEAKER_00:

And you might be thinking of like equipment or a vehicle, but this could also be laptops, cameras, a little piece of machinery, things like that. Anything over$2,500 would be considered an asset, and you could take advantage of that depreciation.

SPEAKER_02:

And hey, there's no reason to overpay just because you're gonna get a great deduction. You should still try to find the best deal possible. I know people think of consumer goods and fun things when they think of Black Friday, but there's no rules that say you can't get a business computer on Black Friday. That could be a great time to upgrade your business computer or whatever you get, you're gonna get a good depreciation deduction this year.

SPEAKER_00:

And I think it is important just to talk about this because if you aren't tax-minded, you might not think of it. But we had a client last year who came about this time and they knew they needed to buy a new vehicle because they were expanding their business, but they just weren't sure if they wanted to do it right now because they were like, well, in a couple of months, this or this may happen. And Carson was like, actually, looking at your year this year, if all of those things do happen, it's much better for you tax-wise to buy it now. And then think next year they had like a few contracts that weren't coming back and all of these things. They didn't really know if they needed the deduction. So to you, like, yeah, December and January are only one month apart, but really it could just be a matter of one day, and it can affect your tax return a lot more than that. So just keep that in mind whenever you're planning that out. You have to think tax wise, not necessarily the way you you might just as a business owner.

SPEAKER_02:

Right. And and they do have great deals on vehicles and things at the end of the year. That's another good reason to buy this time of year, not just to make sure you get the deduction in the current year, but that's a great time to go pick a business vehicle. Sometimes the selection can be a little bit more limited, but for a business vehicle, we usually don't care, right?

SPEAKER_00:

Yeah, you can get just like whatever they have that's new and reliable. So it usually doesn't matter, at least for people buying lots of vehicles like that.

SPEAKER_02:

Number three, year-in bonuses. So we see this a lot. People pay an annual bonus, and sometimes it's based on how the year went, and a lot of times that means they want to do it in January so that they can look at how the books, you know, looked for the year in and base the bonuses on that, which I totally understand. But if there's any way you can get close enough with, you know, 11 and a half months worth of data, then you can accelerate those deductions into the current year. And yes, that means that that's not a bonus deduction you get to take for the next year, but that's next year's problem. Let's save taxes now and who knows what we'll have next year.

SPEAKER_00:

Also, giving bonuses to team members this year, right before Christmas time, is usually a good thing too, because you know, it boosts morale, it gets everyone excited, it helps some families out if they have extra expenses. It's a good time of year to do it. Plus, it just helps you with your profit.

SPEAKER_02:

Just keep in mind if you ever do it twice in a row, people will start to assume it's part of their salary. So if you don't plan for it to be, make sure you make that clear. It it can seem like a way to keep people around, but the second you take it away, people are gonna be mad.

SPEAKER_00:

Yeah, that's kind of a slippery slope as a business owner because I do like giving out a bonus when it's needed, but I don't like it to be like it's expected, you know? Right. Which I just feel like probably every business owner feels that way, but it can feel expected if they get it every year and you're like, well, look what happened this year. I don't know if it should be that quite a big of a bonus, but maybe that just gives you a thought of making sure it's like based on some metric so that you know black and white, this is what the bonus is based on.

SPEAKER_02:

Yeah, exactly. Based on if we're more profitable, the bonuses will be a little bit higher, or if this department did better, then their bonus is gonna be a little bit higher. Yeah, it's just something.

SPEAKER_00:

That would make me feel better as a business owner, so that's just a little random piece of advice. All right, moving on. What do we got?

SPEAKER_02:

Number four, maxing out retirement options. Now, there's a little bit of an asterisk on this one because this is actually one of the deductions that you could do after December 31st. You usually have until you file that business return. But you have to have your 401k or whatever the employer plan is, you have to have it set up before the end of the year, even if you don't actually make the contribution before the end of the year. Uh so that's something to keep in mind. But that doesn't mean you couldn't do it in December if you wanted to, or at least that's the time to decide, okay, we're probably gonna do this percentage of profit as a as an employer contribution to the retirement plans. So anyway, that's a great way to save some money.

SPEAKER_00:

The next one, number five, is to use the Augusta rule. If you haven't heard of the Augusta rule, you can rent out your home to your business for up to 14 days per year and it's tax-free to you. It's a good deduction for your business, but you don't pay taxes on it. It's great, you can use it at the end of the year to host meetings or retreats or like a holiday thing for your team, something like that. And if you haven't heard of this, we have an entire episode. Just search Augusta Roll and you can get like all the fine details. But it is a great thing to use if you are not currently using it.

SPEAKER_02:

And it's a lot of people, that's their slow time. Not if you're in retail, but for many businesses, that's their slow time. So it's a great time to have a company Christmas party or have all of your um key team members uh to your house for a company meeting and all of those things, you can pay that rent to yourself. And it's kind of just a way of making income disappear legally.

SPEAKER_00:

We all love to do that, so definitely check out that episode if you are just hearing of this for the very first time.

SPEAKER_02:

Number six, defer income. So we've all heard of this leave the check in the drawer thing. And I mean that is a thing. If you're a cash basis taxpayer, if you don't deposit that check until the next year, you won't have to report that income until the next year. Most people don't really get paid by check a lot anymore. So that might not be an option, but you could hold off on invoicing people until the very end of the year, like December 30th or 31st, or even wait until January, knowing that you probably won't get paid until January. That's one option if you just had a really big year and you're you have a big invoice that's gonna go out and you're not sure how you're gonna come up with the taxes to pay it.

SPEAKER_00:

Yeah, like I said earlier, a lot of this is just about timing. So you kind of have to know and plan ahead. If you had just a bomb year this year and there was one reason why, you know, and it's not gonna happen next year, then you could just try to shift some of your December income so that maybe next year you're in a different income bracket and you know things look differently. This is all about knowing what the year looked like and to gauge what next year is going to look like.

SPEAKER_02:

Okay, be honest. How's your bookkeeping going?

SPEAKER_00:

If you just cringed a little, this is for you.

SPEAKER_02:

We created a monthly accounting program where you hop on a one-hour call with us every month to tackle bookkeeping, tax planning, business decisions, basically anything you need.

SPEAKER_00:

The best part of this is it's at a reduced hourly rate, so you can easily budget for your accounting help. And because we love our clients, we throw in a free annual tax projection so you're prepared every April 15th.

SPEAKER_02:

Our clients love this plan. It's perfect if you're doing your own books, but want an expert watching over your shoulder and training you on everything you need to do.

SPEAKER_00:

We have all the fine details in episodes 101 and 102 of this podcast if you want to check it out, or just email us at Carson at Sansco.net.

SPEAKER_02:

Now back to the show.

SPEAKER_00:

Number seven is just to make charitable donations. If you have room in your budget for this, you can write off donations to qualified charities and you could sponsor local events or things like that if you are trying to further decrease that taxable income.

SPEAKER_02:

And there are some options for people that they know they want to contribute to charity, but they just need more time to flesh out exactly which charities and how much each one is going to get. We do have some clients that take advantage of donor-advised funds or different similar options where you basically go to a financial advisor or somebody else that can manage this and you do turn over the funds to them and you call it a charitable contribution and you get to deduct it in that year. It goes into a fund that you don't have access to anymore, except for to distribute the funds to other charities. And in fact, you still don't have access because the the person in charge of it, the trustee of that account, they will distribute the funds to charities for you in the future. So let's say it's December, you're like, man, I really need to do a$20,000 donation. First, congratulations on having$20,000 extra dollars. And number two, you don't know exactly where you want it to go. Great. Go ahead and put it in a donor advice fund, and then you have all the time in the world to decide what to do with that money.

SPEAKER_00:

Number eight would be to review your mileage and home office deductions. This is one that people often leave out when they're sending us their books so we can do their tax return because it's not already in there. So just make sure that you add up your miles for the year and that's included. And make sure that you are using the home office deduction if that applies to you and get that in there.

SPEAKER_02:

And this is a great time to do it because it's October. You still have the ability probably to go back. If you didn't, if you don't have your mileage log updated, I'm sure you can still go back and figure out, okay, I went here this day, I went here that day. It's not too late. But once we get into next year, and let's be honest, if you don't have all your stuff together, you're probably extending. So now we're talking a year from now is when you're going to be trying to go back and figure out where in February of 2025, 18 months earlier, where was I? What was I doing? Where did I drive? It's gonna be too late. So now is the time to make sure you have all of that buttoned up.

SPEAKER_00:

And mileage is something that people kind of write off, like, oh, it's just mileage, but it actually adds up very quickly. So it is worth your time to sit down and add up your mileage for the year.

SPEAKER_02:

Especially our real estate agents. I mean, I know a lot more is done on the computers, but some people are still driving around to open houses and showings every single day. I mean, they're getting tens of thousands of miles, and that adds up to a huge deduction.

SPEAKER_00:

Number nine is one we talk about all the time because it is likely the most important thing on this list. Clean up your books. Now is the time to do it. Get everything reconciled, categorize your expenses, know that your PL is right. That is such a huge one. Every single tax year, we have multiple clients send over their PL and they say, Hey Carson, here's my PL. Can you please do my tax return? And we're like, Yeah, great, let's do the tax return. And then Carson does the tax return, sends it over to them, and they have a heart attack because the tax return says, Oh, you made a million dollars this year. And they're like, Wait, I did not make a million dollars. And Carson's like, Oh, well, that's what your PL says right here. And they were like, Oh, there's something going on. And sure enough, we look into the books and we're like, you double counted all of your income all year long. So somehow in there, they didn't review their books, they didn't review their PL, they weren't keeping track of it, or something got off in QuickBooks something, it didn't look right. Now is the time to look and make sure it's okay if you haven't looked all year, we get it, but you need to now need to review it and make sure everything looks good to you. And now is the time.

SPEAKER_02:

Yes, because can you do it in January and then still get it cleaned up and we can have an accurate tax return? Absolutely. But that's all we're gonna have is an accurate tax return. There's no chance for us to save you any taxes at that point, it's too late. But if you do it now, there's still three months to figure out something that we can do to help you save some taxes.

SPEAKER_00:

And none of these should be even thought about until you have an accurate set of books because you don't know. You don't know if you need to do these things now or wait till later. You have no idea until everything is correct. So, first and foremost, and just a little side note to our monthly accounting plan that is one reason that we do it. I'm sure you've heard the ad in this episode, but it's all about just accountability and making sure that you are getting in your books and getting things done every single month so that this doesn't happen.

SPEAKER_02:

All of our monthly clients know exactly how much income they have and what they need to do to minimize their taxes.

SPEAKER_00:

And there's no surprises because they have been on phone calls with Carson every single month. He has looked at their books. If there's something they didn't know how to categorize, he's helped them. If there was one of these things where it was double counting income from Square or Shopify or something, they've already fixed it. Carson's already known that, and they've reviewed the PL so that they know it's accurate. They go, Yep, that's how much money I made. Everything looks correct, and everything's ready to go for a tax projection, which I'll let you talk about that because that's our last point.

SPEAKER_02:

Number 10, schedule a tax projection or a strategy call. It's not as complicated as it sounds. It just means that you know, we take a look at your books, we make sure that everything's categorized and reconciled, and after that, we start looking at how much profit do you have, how much depreciation do we have, what is that going to look like for your personal tax return, and how much are you going to owe? And if you're happy with that amount, great. If not, then what can we do to fix it? Are there still things are there things you can buy? Are there retirement options? All the things we talked about on this episode and and many, many other options are available, but you have to do it before the end of the year or it's really too late.

SPEAKER_00:

And also our monthly accounting plan does include a tax projection because every business owner should be doing one. I know it stings to pay for a tax projection when you're like, it's not necessary, but it's needed, kind of like getting your teeth clean. It's not necessary, but you should do it. Same thing here. It is necessary and it will save you more than you actually pay for the tax projection.

SPEAKER_02:

Yes, that is one of the good points about it. Because sometimes people do think, like, well, I set aside a lot of money, so whatever I owe, I owe. Uh, you know, a projection is not going to change that. It's just gonna let me know a little bit earlier. But sometimes there are things that we can look at as part of that, as a planning and consultation type situation to reduce that. So yeah, it's definitely worth looking into. It's not really that expensive. One other note, it's not one of the 10, but it goes along with almost all 10 of these, is a lot of these involve spending money. If spending money will help you grow your business, then that's a good way to get a tax write-off. But you're never going to get more tax savings from spending money than you actually spent on the thing, right? So don't go buy a bunch of crap you don't need and don't send gifts if you don't think if you if you don't have the kind of clientele that's gonna appreciate that and where that's gonna make a difference. Don't buy equipment you don't need. Don't set up a retirement plan if you have the kind of employees that don't really require having a retirement plan to keep them, if that makes any sense.

SPEAKER_00:

We're never gonna tell you to spend money when you don't need to, because running a successful, profitable business really does require making sure that you are running lean and that you're not spending money on things that you don't need. So some of these, like the Augusta rule and reviewing your books and reviewing your mileage and all of that, that costs nothing. That's really just a matter of being organized. And being disorganized costs our clients so much more money. Every single year we see so many people doing this. If they would have just been organized, they wouldn't have had to pay extra in taxes, or a lot of times they pay a lot of money to us to go back and do something that would have been very easy for them to do. But once so much time has passed and they don't know where everything is and everything's messed up because they didn't do it right the first place, it costs a lot of money to go back and fix it. So you can save yourself money right there just staying on top of your accounting and doing these things. So, just to recap, do not wait until the year has ended to do all of these things because a lot of these you can't take advantage of if you don't do them now. Smart business owners and our clients all do these before December 31st. So if you're listening to these, just give yourself a little goal of going through these and implementing them. Maybe put it on your calendar that you're gonna do it on this day and set aside the work time. Sometimes, as business owners, you have to actually put in your calendar when you're gonna work on your business. So make a mental note or do it right now, put it in your calendar to do these things. Don't just listen to this episode and think, yeah, I'll just do that later.

SPEAKER_02:

Yeah, put one on your calendar for this week and one on your calendar for next week specifically. Not just that, oh, I'm gonna do tax planning. No, put which one of these 10 things you're going to do specifically and then do it. Well, that's all we have for today.

SPEAKER_00:

So until next time, thank you so much for listening to what your CPA wants you to know podcasting.

SPEAKER_01:

This podcast is intended to provide accounting and tax information for educational purposes only. All tax situations are unique and can be handled with the assistance of a tax professional.