Year-end is your chance to turn business success into long-term personal wealth by acting on taxes, retirement, and planning before December 31. With major tax law changes from the new OBBBA, now is the time to align your business and personal strategies for maximum advantage.
Below are five moves to consider before the calendar turns.
1. Take Advantage of the Temporary $40,000 SALT Deduction
The OBBBA temporarily raises the state and local tax (SALT) deduction cap from $10,000 to $40,000 for itemizers beginning in 2025, lasting through 2029. The expanded deduction phases out between $500,000 and $600,000 of MAGI, making income management rather than deduction stacking more effective.
Business owners near the threshold should consider:
- Time your income: Delay bonuses, taxable distributions, or stock sales into 2026 if possible
- Maximize pre-tax contributions: Contribute to retirement plans and HSAs to lower MAGI
- Evaluate pass-through entity tax elections (PTET): Paying state taxes at the entity level can increase deductibility for S corps, LLCs, and partnerships
A few coordinated moves can help preserve the full benefit of this temporary expansion.
2. Revisit Business Tax Opportunities Under the OBBBA
OBBBA introduced several business-friendly tax updates. Many of the temporary rules from the 2017 Tax Cuts and Jobs Act have now been restored or made permanent, creating new opportunities for business owners to review how their operations and investments are structured.
Key highlights include:
- 100% bonus depreciation on qualifying property
- Expanded Section 179 expensing limits and thresholds
- Immediate deduction for domestic R&E costs
- Permanent 20% QBI deduction for qualifying pass-through income
- Enhanced Section 1202 gain exclusion for qualified small business stock
3. Plan Ahead for Charitable and Estate Gifting Before 2026
Beginning in 2026, charitable deductions become less valuable due to a new 0.5% AGI floor and an itemized deduction phaseout for high earners, reducing the effective tax benefit of giving. Business owners expecting a high-income year or a liquidity event may find 2025 a more favorable time to make charitable gifts, particularly when donating appreciated assets or ownership interests before a transaction.
At the same time, the federal estate and gift exemption is scheduled to increase to $15 million per person ($30 million for couples) in 2026, creating opportunities for efficient wealth transfer. Business owners can use this environment to make lifetime gifts, transfer minority interests using valuation discounts, or reduce future taxable estates, particularly in states like Oregon and Washington, where state estate taxes apply but lifetime gifts are not taxed.
4. Maximize Retirement Contributions – and Understand the New Catch-Up Rules
For 2025, employees can defer up to $23,500 to a 401(k), plus a $7,500 catch-up if age 50 or older.
Those ages 60 to 63 qualify for a larger “super catch-up” of $11,250, replacing the standard $7,500 catch-up, allowing total employee deferrals of up to $34,750 and a combined limit (including employer contributions) of $81,250.
Business owners can tailor plan designs that favor owners while remaining compliant and rewarding employees, for example, through profit-sharing formulas, new comparability allocations, or cash balance plans. Reviewing plan design now can meaningfully reduce 2025 income and build long-term wealth in a tax-advantaged way.
Owners anticipating a one-time income surge, such as from selling a division, property, or receiving an earnout, can use increased plan contributions to offset that increase and lock in deductions under current rules before 2026’s new limits take effect.
5. Consider Roth Conversions in Low-Income or Transition Years
If your business is in a lower-revenue year, transitioning ownership, or you’re reinvesting profits for growth, it may be an ideal time to adjust when and how you recognize income and deductions. For example, you could convert part of a Traditional IRA to Roth while your tax rate is temporarily lower, realize long-term capital gains at favorable rates, or accelerate expenses, such as equipment purchases or depreciation, to reduce future taxable income.
Owners anticipating a sale or succession should also coordinate retirement and liquidity planning together. Modeling taxable income across several years can prevent bracket creep, manage exposure to SALT phaseouts, and maximize deductions available before 2026’s rule changes.
A coordinated plan between your CPA and wealth advisor can turn transition years into powerful tax-optimization opportunities.
As you wrap up the year, it’s worth taking time to confirm that your financial, tax, and business decisions are working together rather than in silos. Make sure you work with an advisor who understands private company owners and focuses on both your business and personal goals. A coordinated review before December 31 can help you stay ahead of upcoming rule changes, avoid unnecessary surprises, and position both your business and your family for a stronger, more intentional financial future.
Disclosure: This material is for informational purposes only and is not intended to be tax, legal, or investment advice. Please meet with your CPA, attorney or advisor to better understand how this information applies to your specific situation.
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