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Year-End for Individuals

As the year draws to a close, taxpayers should review their finances to optimize tax efficiency. One key strategy is maximizing retirement contributions, such as contributing to an IRA or 401(k), which can lower taxable income. Charitable donations also offer tax deductions; making donations before year-end can reduce your tax liability.

Reviewing capital gains and losses allows taxpayers to offset gains with losses, minimizing taxes on investments. Consider bunching deductible expenses, like medical costs or property taxes, to surpass the standard deduction threshold.

Tax-loss harvesting involves selling underperforming assets to realize losses, offsetting gains elsewhere.

Consult with your tax professional to ensure these strategies align with your individual circumstances before year-end for potential tax savings.

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Your Year-End Business Plan

If you own a small business, reducing your 2025 tax bill and planning for a successful new year should be on your radar as the current year draws to a close.

CHECK YOUR RECORDS

Start by making sure your books are accurate and up to date. Consult your tax professional to resolve any questions you have before tax season arrives, so you’re not left trying to sort things out at the last minute. Reviewing both your income statement to get a handle on profits and losses and your cash flow statement to see how money was spent can help you plan for next year.

DEFER INCOME

One way to lower this year’s tax bill is by deferring income to the beginning of 2026. This tactic makes sense, especially if you expect your income to be less next year.

INCREASE DEDUCTIONS

Purchasing supplies in advance and upgrading equipment before the end of the year may help you maximize deductions on your 2025 return, assuming you pay for them before year’s end.

CONTRIBUTE TO A RETIREMENT PLAN

You can reduce your 2025 income by making contributions to your retirement plan. Contribution limits vary, depending on the type of plan. Your financial professional can let you know how much you can contribute.

CONSIDER YOUR WORKSPACE

If you’re self-employed or you work from home and have a dedicated room or space for conducting business, you may be eligible to take the home office deduction. Rules for claiming the deduction are specific, so consult your tax advisor.

DEDUCT BAD DEBT

On occasion, your business may have customers who have not paid you for goods or services within a reasonable period. If you have unpaid invoices and no reasonable expectation of payment, you may be able to deduct the debt on your tax return.

REVISIT YOUR GOALS

Year’s end is an appropriate time to look at the goals you set for the year and assess whether you achieved them. If your goals fell short of your expectations, determine the reasons. Then think about the steps you can take in the new year to position your company to thrive.

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October 2025 Client Line Newsletter

Your Year-End Business Plan – if you own a small business, reducing your 2025 tax bill and planning for a successful new year should be on your radar.

Year-End for Individuals – taxpayers should review their finances to optimize tax efficiency.

A Time for Giving – year-end is a time for giving to charity.

October 2025 Client Profile

Making Informed Benefits Selections – open enrollment is a crucial time for employees to review and update their benefits for the upcoming year.

Considerations for Employers – open enrollment is an opportunity to review and communicate benefit offerings to their employees.

October 2025 Question and Answer

Holiday Tipping Guide: a Refresher – guidelines for tipping service providers.

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Year-End Tax Planning for Your Business

September is the perfect time for business owners to review their financial standing and plan for the final quarter. Working with a tax professional now can help maximize savings, avoid surprises, and ensure smooth tax compliance. Here are key topics to discuss:

YEAR-END TAX PLANNING

Identify tax-saving opportunities before year-end. This might include deferring income, accelerating expenses, or maximizing deductions like retirement contributions or business expenses.

ESTIMATED TAX PAYMENTS

Review whether quarterly estimated tax payments are on track. September is the third quarter, and adjustments may be needed to avoid underpayment penalties.

RETIREMENT PLANS

Consider contributing to retirement plans like a 401(k), SEP IRA, or SIMPLE IRA. Tax professionals can advise you on the best strategy to reduce taxable income while preparing for retirement.

BUSINESS STRUCTURE REVIEW

Depending on your business’s growth, it might be time to reassess your business structure (LLC, S-corp, etc.) for tax efficiency. A change could provide significant savings.

TAX CREDIT OPPORTUNITIES

Discuss available credits such as the Research and Development (R&D) Tax Credit or hiring incentives, like the Work Opportunity Tax Credit.

CAPITAL EXPENDITURES

If you plan to make significant purchases or investments, discuss depreciation options and how they could impact your taxes. By reviewing now, business owners can end the year strong and position themselves for success in the new year.

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September 2025 Question and Answer

QUESTION:

I filed my Free Application for Federal Student Aid (FAFSA) form, but I have corrections. Can I still make updates to my application?

ANSWER:

For the 2024-25 academic year, the federal FAFSA deadline was June 30, 2025. However, you have until September 14, 2025 to make corrections or updates to your application.

Many states and colleges have their own earlier deadlines for financial aid. It is crucial that you check with the specific institutions you are interested in to ensure you meet their deadlines.

The 2025-26 academic year deadline to submit your FAFSA form is June 30, 2026.

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Manage Your Debt Portfolio

Like most people, you probably have a debt portfolio in addition to your investment portfolio. To make the most of your finances, you need to evaluate your debts regularly, just as you evaluate your investment performance. As we approach the final quarter of 2025, now is a good time to conduct a review to stay on track. Here are some debt management tips:

  1. Categorize debts into good and bad debt and assess how they align with your financial goals.
  2. Focus on paying off high-interest, bad debts first.
  3. Leverage good debt. Ensure your investments have a clear return pathway and weigh the risks associated with borrowing.
  4. Seek professional guidance.

Navigating debt can be complex. Talking with your trusted advisor about tailoring your strategy based on your financial situation can provide valuable insights. Contact your trusted advisor today to discuss your unique situation.

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Safeguard Your Business From Fraud

Sadly, fraudsters are continually looking for ways to make a quick buck at your company’s expense, so make sure you’re taking steps to protect your business from all types of threats.

LOOK INSIDE

Preventing fraud from the inside involves ensuring employees’ duties are adequately segregated. Make sure that more than one person has responsibility for each process. And consider requiring vacations. That will give you a chance to complete an audit in an employee’s absence to ensure everything is working as intended.

ONLINE AWARENESS

Outsiders can take control of your entire network, knocking you offline and locking you out of your files until you pay them a fee. Protect your company from cyber fraud by using secure and private internet connections. When employees travel, provide them with data hotspots, so they don’t need to rely on public internet options. And keep all software, firewalls, and antivirus software updated to prevent hacks and ransom attacks.

ON-PREMISE

Protecting your office goes beyond the cybersphere. Having a secure entry system helps to keep unwanted visitors out. Consider limiting employees’ access to sensitive areas. For example, allowing only IT managers access to the server room.

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September 2025 Client Profile

Christine is a small business owner who sells handmade furniture. In 2024, her business has had a successful year, and she is considering selling a piece of property she owns. The property was originally purchased for $150,000 five years ago, and its current market value is $250,000. Christine expects to make a $100,000 profit on the sale.

Since the property was held for more than a year, the profit is considered a long-term capital gain, which is typically taxed at a lower rate than ordinary income. Christine’s federal long-term capital gains tax rate could range from 0% to 20%, depending on her overall taxable income for the year.

However, Christine also has some concerns about the depreciation she claimed on the property in previous years. Depreciation can result in depreciation recapture, which is taxed as ordinary income, potentially at a higher rate.

By consulting her tax advisor, Christine can determine the best course of action to minimize her tax burden with strategies like offsetting the gain with other losses or planning for any depreciation recapture, ensuring she doesn’t pay more than necessary in taxes.

Client Profile is based on a hypothetical situation. The solutions discussed may or may not be appropriate for you.

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Life Insurance: Part of Your Financial Plan

Life insurance, often referred to as “love insurance” is a crucial aspect of financial planning, offering essential protection for individuals and their families.

Its primary role is to provide a safety net in the event of an untimely death, helping loved ones manage financial responsibilities like mortgage payments, debts, and education costs. However, life insurance is not just for personal security; it can also serve as an important tool for business owners.

PROTECTING YOUR BUSINESS

For business owners, life insurance can be used to protect both the company and the family. A key person life insurance policy can help cover the loss of a critical employee or owner, providing the business with financial stability to weather the transition. In the case of a partnership, buy-sell agreements funded by life insurance allow surviving partners to buy out the deceased’s share of the business, preventing conflicts and ensuring smooth continuity.

Additionally, some life insurance policies build cash value over time, providing a potential source of retirement savings or emergency funds. For business owners looking to diversify their financial planning, these policies can offer an alternative to traditional investment options.

TAX CONSIDERATIONS

However, life insurance policies come with various tax considerations. The proceeds from life insurance are generally tax-free for beneficiaries, but the way a policy is structured can influence how taxes affect the overall financial situation. For business owners, life insurance can have implications on both personal and business taxes, particularly when using the policy as part of succession planning or funding business agreements.

WORK WITH A PRO

A tax advisor can help business owners optimize their life insurance policies, ensuring they are tax-efficient and aligned with their overall financial goals. Whether structuring key person insurance, designing buy-sell agreements, or planning for estate taxes, a tax professional can guide business owners to make the most of their life insurance strategy.

Life insurance is essential for both personal and business financial security. For business owners, it offers additional benefits, including risk management, succession planning, and tax advantages — making it even more important to work with a tax professional to maximize these benefits.

72% of people overestimate the cost of a life insurance policy with the perception that it cost three times more than its actual price.

Source: 2024 Insurance Barometer Study, Life Happens and LIMRA

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Tax-Efficient Strategies

Capital gains taxes can significantly impact the returns on your investments. By working with a tax professional they’ll help you understand the difference between short-term and long-term capital gains tax rates, ensuring that you are minimizing your tax liability.

Utilize tax-efficient strategies, such as tax-loss harvesting, where you offset gains by selling other investments at a loss. This approach can help reduce your overall taxable income for the year.

For business owners, capital gains may arise from the sale of a business or property. A tax professional can help structure the sale in a tax-advantaged way, taking into account depreciation recapture and other complex issues that could affect the final tax outcome.

Consulting a tax advisor ensures that you’re making informed decisions as they are up to date on new tax laws.