Year-End Tax Planning Checklist: 15 Critical Moves Before December 31
Don't Let December 31st Sneak Up On You
Here's the hard truth: Once the clock strikes midnight on New Year's Eve, your opportunities to reduce your 2025 tax bill are gone.
Most self-employed professionals wait until March or April to think about taxes. By then, all they can do is report what happened—not change what they owe.
But smart business owners? They're taking action right now.
Whether you're a consultant, freelancer, small business owner, or real estate investor, this checklist could save you $5,000 to $50,000+ in taxes over the next 60 days. Not through shady loopholes—through legitimate tax strategies built into the tax code.
Let's make sure you're not leaving money on the table.
Who This Checklist Is For
This guide covers strategies for:
✅ Self-employed professionals (consultants, freelancers, contractors)
✅ Small business owners (retail, service, e-commerce)
✅ Real estate investors (rental properties, STRs, flips)
✅ Side hustlers with significant 1099 income
✅ Anyone with pass-through business income (LLC, S-Corp, sole proprietor)
Each strategy is labeled so you can quickly identify what applies to you.
How to Use This Checklist
Print this page and work through each section with your CPA. Some strategies apply to everyone, others are situation-specific. The key is reviewing them NOW—not in December when everyone's scrambling.
Timeline:
✅ By November 15: Review and strategize
✅ By December 15: Execute most strategies
✅ By December 31: Finalize everything
✅ By January 15: Estimated tax payments (if needed)
Section 1: Year-End Income & Expense Review
🎯 Applies to: EVERYONE
✅ Run a Preliminary Tax Projection
Why it matters: You can't optimize what you don't measure.
Action items:
Gather YTD profit & loss statements for all business activities
Total up W-2 income, 1099 income, business income, and other sources
Estimate your 2025 taxable income
Calculate your estimated tax liability
Compare to what you've paid in estimated taxes/withholding
Red flag: If you owe more than $5,000 at filing, you may face underpayment penalties.
Next step: Schedule a tax projection call with your CPA. Book here →
✅ Accelerate Deductible Expenses Into 2025
🎯 Applies to: EVERYONE (especially cash-basis taxpayers)
The strategy: Move planned 2026 expenses into December 2025 to deduct them this year.
Universal Expenses to Prepay or Complete by Dec 31:
Office supplies and equipment
Software subscriptions and licenses (annual plans)
Professional services (CPA, attorney, bookkeeper, consultant fees)
Business insurance premiums
Advertising and marketing expenses
Website hosting and maintenance
January rent on office space (if cash-basis)
Professional development courses or certifications
Equipment maintenance and repairs
Industry-Specific Additions:
For Service Professionals:
Professional association dues
Continuing education courses
Client management software subscriptions
Marketing materials and business cards
For Real Estate Investors:
Property repairs and maintenance (must be completed AND paid)
Property management fees
Landscaping and snow removal
Property taxes (if not escrowed)
For Retail/E-commerce:
Inventory purchases (if beneficial)
Point-of-sale system upgrades
Packaging and shipping supplies
Store fixtures and displays
Example: You plan to upgrade your business software in January ($6,000/year). If you prepay in December instead, you deduct $6,000 this year. At a 30% tax rate, that's $1,800 back in your pocket.
Caution: Only do this if you actually need these expenses. Don't buy things solely for the tax break—that's a net loss.
✅ Consider Deferring Income (If Strategic)
🎯 Applies to: Cash-basis taxpayers with flexibility
The strategy: If you're cash-basis and control timing, push income into 2026.
When this makes sense:
You're already in a high tax bracket this year
You expect lower income next year (retirement, sabbatical, business slow-down)
You've maxed out other deduction strategies
You anticipate major deductions in 2026
How to defer:
For Consultants/Freelancers:
Delay invoicing until January
Delay project completions until January (if possible)
Request clients hold December checks until January 2
For Business Owners:
Postpone year-end bonuses to yourself until January
Delay large customer payments until January
Hold end-of-year sales/promotions until January
For Real Estate Investors:
Ask December tenants to pay January rent on Jan 1 (not Dec 31)
Postpone property sales closing until January
Delay flip property sales
When NOT to defer: If you think tax rates will increase, or if you need the cash now for operations.
Section 2: Retirement & Tax-Advantaged Accounts
🎯 Applies to: EVERYONE
✅ Max Out Retirement Contributions (2025 limits)
For W-2 Employees (with or without a side business):
401(k): $23,500 (under 50) or $31,000 (50+)
Ages 60–63 in 2025: special catch-up of $11,250 (replaces the usual $7,500).Traditional/Roth IRA: $7,000 ($8,000 if 50+)
For Self-Employed (choose one):
Solo 401(k): $23,500/employee + up to $46,500 employer = $70,000 total 415(c) limit (plus applicable catch‑up)
SEP IRA: Up to $70,000 or 25% of compensation
SIMPLE IRA: $16,500 based deferral; $3,500 catch‑up (50+); ages 60–63: $5,250 catch-up. Certain small employer’s may allow up to $17,600 deferrals under SECURE 2.0.
Tax savings example:
Contribute $23,500 to Solo 401(k)
Tax bracket: 24%
Immediate savings: $5,640
Key deadlines:
Solo 401(k): Generally establish by Dec 31, 2025 (fund by return due date). Sole proprietors may have retro‑adoption options under SECURE 2.0 (talk to your CPA).
SEP IRA: Can establish and fund until April 15, 2026 (or Oct with extension)
SIMPLE IRA: Must be established by Oct 1, 2025 (for 2025 contributions)
Which plan is right for you?
Solo 401(k) usually wins at higher profits or if you want Roth/loans; SEP wins for simplicity; SIMPLE is great for lean payroll setups.
✅ Evaluate Roth Conversions
🎯 Applies to: Anyone with traditional IRA/401(k) funds
The strategy: Convert traditional IRA/401(k) funds to Roth, paying taxes now at potentially lower rates.
When to consider:
You had an unusually low‑income year
You're between jobs or contracts
You expect higher tax brackets in retirement
You want to reduce future Required Minimum Distributions (RMDs)
You had significant business losses this year (offset with conversion)
Caution: Don't convert so much that you jump into the next tax bracket. Model scenarios first.
Section 3: Asset Purchases & Depreciation
🎯 Applies to: Anyone purchasing business equipment
✅ Take Advantage of Section 179 & Bonus Depreciation (2025)
The benefit: Deduct the full cost of qualifying assets in Year 1 (instead of depreciating over 5–7 years).
2025 Limits (updated):
Section 179 expensing: up to $1,250,000; phase-out begins at $3,130,000; SUV cap $31,300
Bonus depreciation: 100% for qualified property acquired and placed in service after Jan 19, 2025; property before that date in 2025 follows the prior 40% phase-down
Luxury passenger auto caps (2025):
With bonus: $20,200 Year 1 (then $19,600, $11,800, $7,060)
Without bonus: $12,200 Year 1
Qualifying purchases for ALL businesses:
Business vehicles (with limitations for passenger autos)
Office furniture and equipment
Computers, tablets, and smartphones
Software and technology
Machinery and manufacturing equipment
Point‑of‑sale and security systems
Example:
Buy $50,000 vehicle for business in December
First‑year write‑off subject to the above caps and rules
Critical deadline: Asset must be purchased AND placed in service by December 31.
Action: If you've been considering buying equipment or a vehicle, do it this month.
✅ Capitalize on the De Minimis Safe Harbor
🎯 Applies to: EVERYONE
The hidden gem: Deduct items up to $2,500 per invoice / item immediately (or $5,000 if you have an applicable financial statement).
What qualifies:
Office furniture pieces under the threshold
Computer equipment
Small tools and equipment
Printers and scanners
Section 4: Business Structure & Entity Planning
🎯 Applies to: Sole proprietors and LLC owners
✅ Evaluate S‑Corp Election for 2026
The benefit: Reduce self‑employment tax on business income.
When it makes sense:
Net business income over ~$60K/year
You're currently a sole proprietor or single‑member LLC
You're willing to run payroll
Your business has consistent, reliable income
What you need to know:
Must pay yourself "reasonable compensation" (W‑2 wages)
Requires payroll setup and quarterly filings
Additional accounting costs ($500–$2,000/year)
Makes sense if savings > additional costs
Deadline for 2026: Elect by March 15, 2026 (for 2026 tax year).
Action: Schedule a consultation to run the numbers. Book here →
✅ Review Qualified Business Income (QBI) Deduction (2025)
🎯 Applies to: Pass‑through business owners
The benefit: Up to 20% deduction on qualified business income.
Key thresholds (updated for 2025):
SSTBs generally lose the deduction above ~$494,600 (MFJ) / $247,300 (Single/MFS)
For non‑SSTBs above those levels, wage/property limits apply
How to maximize:
Reduce taxable income with timing and deductions
Increase qualified property (equipment purchases, Section 179)
Pay reasonable W‑2 wages (if S‑Corp)
Section 5: Real Estate‑Specific Strategies
🎯 Applies to: Real estate investors only
✅ Conduct a Cost Segregation Study
The game‑changer: Accelerate depreciation by identifying shorter‑life components.
Traditional depreciation example:
$500,000 rental property depreciated over 27.5 years → $18,182/year
With cost seg: Larger deductions earlier; often pairs well with bonus/179 (subject to rules).
✅ Make/Confirm Real Estate Professional (REP) Status
Track material participation hours (750+ and >50% of personal services)
Keep contemporaneous logs; consider grouping election where appropriate
Tax impact example: If you have $50K in rental losses and qualify for REP Status, you could save $15,000 in taxes (30% rate).
✅ Make the Rental Property Grouping Election
Treat all rentals as one activity to meet material participation
File with your tax return; hard to unwind later
✅ Review 1031 Exchange Opportunities
Day 0: Close on sale
Day 45: Identify replacement (in writing)
Day 180: Close on replacement
Caution: Use a qualified intermediary; strict timelines.
✅ Leverage Short‑Term Rental Rules
STRs (avg stay <7 days) can avoid passive loss limits if you materially participate
Track hours, keep records, separate STR vs LTR accounting
Section 6: Estimated Taxes & Compliance
🎯 Applies to: EVERYONE with self‑employment income
✅ Calculate Q4 Estimated Tax Payment
Due date: January 15, 2026 (for Q4 2025)
Safe harbor rule: Pay the lesser of:
90% of your 2025 tax liability, OR
100% of your 2024 tax liability (110% if prior‑year AGI > $150K)
Pro tip: If income was lumpy, consider the annualized method to cut penalties.
✅ Review W‑4 Withholding (If You Have W‑2 Income)
Increase December withholding to cover any shortfall; IRS treats it as paid evenly over the year
Section 7: Tax‑Loss Harvesting & Investments
🎯 Applies to: Anyone with taxable investment accounts
✅ Harvest Capital Losses
Sell losers before Dec 31 to offset gains; excess offsets up to $3,000 ordinary income; carryforward remaining losses
Watch the wash‑sale rule (30‑day window)
Section 8: Record‑Keeping & Documentation
🎯 Applies to: EVERYONE
✅ Organize Financial Records
Compile receipts; categorize in QuickBooks/FreshBooks/Excel
Separate personal and business expenses
Maintain mileage logs and save contractor/vendor documents
Back up to cloud storage; keep records ~7 years
✅ Review Home Office Deduction Eligibility
Simplified method: $5/sq ft up to 300 sq ft (maximum $1,500)
Actual method: Business‑use % × eligible housing costs (depreciation recapture applies)
Section 9: Charitable Giving & Energy Credits
🎯 Applies to: Homeowners & donors
✅ Bunch Charitable Contributions (2025 Standard Deduction – updated)
Married Filing Jointly: $31,500
Head of Household: $23,625
Single/MFS: $15,750
DAF tactic: Contribute in 2025, grant over 2025–2026 while taking the full 2025 deduction.
✅ Claim Energy Credits (still active in 2025)
Residential Clean Energy (25D): 30% for solar, wind, geothermal
Energy Efficient Home Improvement (25C): Up to $3,200/year (sub‑limits apply)
Commercial Buildings (179D): Up to $5.00/sq ft when requirements are met
Section 10: Industry‑Specific Strategies
For Consultants & Freelancers
Professional development; software subscriptions; client meals (50%); travel with documentation; coworking fees
For E‑commerce & Online Businesses
COGS method; platform fees; packaging/shipping; returns/refunds; hosting/security
For Healthcare Professionals (with practices)
Medical/diagnostic equipment; EMR subscriptions; CME/licensing; malpractice insurance; memberships
For Retail & Restaurant Owners
Inventory method (FIFO/LIFO considerations); Qualified Improvement Property; eligible restaurant equipment; tip‑credit optimization
Section 11: Final Review & Professional Guidance
🎯 Applies to: EVERYONE
✅ Schedule Year‑End CPA Review
Bring: P&Ls, list of 2025 purchases, questions, 2026 plans, prior‑year return
Expect: 2025 tax projection; action list; 2026 entity recommendations; 2026 estimated payments; bookkeeping cleanup plan
Red flags to discuss: Misclassified expenses, missing docs, unreported income, potential audit triggers
Your Year‑End Action Plan
By November 15
Print this checklist; schedule CPA meeting; review YTD financials; identify strategies; organize receipts
By December 1
Make equipment/supply purchases (179/bonus rules above)
Prepay deductible expenses
Harvest tax losses
Max out retirement contributions (or set plan)
By December 15
Complete real estate strategies
Finalize charitable giving
Review/adjust estimated payments
Confirm S‑Corp election timeline (for 2026)
By December 31
Pay for all deductible expenses; place assets in service
Confirm all strategies executed; save receipts/contracts
Take home‑office photos/documentation
By January 15, 2026
Make Q4 2025 estimated tax payment (if needed)
File any business registrations for 2026
Common Year‑End Mistakes to Avoid
❌ Waiting until late December
❌ Mixing personal and business expenses
❌ Not tracking mileage contemporaneously
❌ Buying assets you don’t need
❌ Forgetting state tax obligations
❌ Ignoring estimated-tax penalties
❌ Claiming 100% business use on vehicles/home office
❌ DIY‑ing complex strategies without a pro
Ready to Stop Overpaying on Taxes?
Don't let December 31st pass without taking action. Every day you wait is money left on the table.
Schedule your Year-End Tax Planning Session:
📧 Book Your Consultation: Book your Initial Consultation Now!
We'll review your specific situation, identify your biggest tax‑saving opportunities, and create an action plan to implement before year‑end.
Who We Help
The RVA Accountant specializes in strategic tax planning for:
✅ Real Estate Investors (rental properties, STRs, flips, wholesaling)
✅ Self‑Employed Professionals (consultants, freelancers, contractors)
✅ Small Business Owners (retail, service, e‑commerce)
✅ Healthcare Professionals with private practices
✅ Online Business Owners and digital entrepreneurs
✅ Anyone with 1099 income looking to optimize taxes
Free Resources
Download these free guides to maximize your tax savings:
✅ The Real Estate Investor's Tax Deduction Checklist – 30+ deductions most investors miss
✅ Self‑Employed Tax Planning Guide – Quarterly planning calendar
✅ S‑Corp vs. LLC Decision Matrix – Find your optimal structure
About The RVA Accountant
Jéron Crooks, CPA specializes in strategic tax planning for self‑employed professionals, business owners, and real estate investors in Richmond, Virginia and nationwide.
With 8+ years as a CPA and 13+ years of professional experience, Jéron helps clients stop overpaying on taxes through proactive strategies like entity structuring, retirement planning, cost segregation, and year‑round tax optimization.
Why clients choose us:
✅ Proactive tax planning (not just April filing)
✅ Industry‑specific expertise (real estate, consulting, e‑commerce)
✅ Year‑round availability (not just during tax season)
✅ Clear communication (no confusing jargon)
✅ ROI‑focused (we save more than we cost)
Areas of expertise:
Strategic tax planning for self‑employed individuals
Entity selection and S‑Corp optimization
Real estate taxation (rentals, STRs, 1031 exchanges)
Retirement planning (Solo 401k, SEP IRA)
Multi‑state tax compliance
IRS audit representation
Disclaimer: This checklist is for informational purposes only and does not constitute tax advice. Tax laws are complex and change frequently. Consult with a qualified CPA to determine which strategies apply to your specific situation.
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