2025 Last-Minute Year-End Business Tax Deductions You Don’t Want to Miss
If you’re a business owner, listen up—because this is the rare situation where the IRS might actually end up giving you money.
Well… maybe not by mailing you a check (though that does happen in the right circumstances).
But you will feel it when you hand over far less to Uncle Sam.
Below are six powerful, practical, totally legal tax strategies you can still use before December 31, 2025. Every one of them is simple to understand and easy to put into action.
Let’s dive in.
1. Prepay Expenses Using the IRS Safe Harbor
Believe it or not, the IRS occasionally throws business owners a bone—and the safe-harbor prepayment rule is one of those rare gifts.
If you're a cash-basis taxpayer, the IRS allows you to prepay certain expenses up to 12 months ahead and deduct them immediately. No pushback, no questions, no adjustments.
Eligible prepayments can include:
Vehicle or equipment leases
Office or building rent
Business and malpractice insurance premiums
Quick example:
You pay $3,000 a month in rent and want a bigger deduction this year. On December 31, 2025, you mail a $36,000 check covering all of 2026’s rent.
Here’s what happens:
You deduct $36,000 in 2025.
Your landlord reports the income in 2026.
Win-win. You get the deduction now; your landlord gets predictable income later.
2. Stop Billing Customers, Clients, or Patients
If you’re cash-basis, this strategy is as simple as it gets:
Don’t send invoices until January.
If you don’t bill them, they don’t pay you—and if they don’t pay you, you don’t owe tax on that income for 2025.
Example:
Jake the dentist usually bills weekly. This year, he skips all December billing and sends invoices during the first week of January.
Result? He shifts all that December income into 2026 and lowers his 2025 taxable income.
Old tactic. Still brilliant.
3. Buy Office Equipment Before Year-End
The One Big Beautiful Bill Act (OBBBA) brought back 100% bonus depreciation and expanded Section 179 expensing.
Translation: Buy qualifying equipment before December 31 and you can deduct 100% of it right away.
This includes:
New or used machinery
Computers and tech
Desks, chairs, and office furniture
Certain qualifying vehicles
If you’ve been planning to upgrade, doing it now could significantly reduce your tax bill.
4. Use Your Credit Cards Strategically
Here’s a timing trick many business owners miss:
If you're a sole proprietor or single-member LLC, the date you charge a business purchase on any credit card (personal or business) is the date you can deduct the expense.
For businesses operating as corporations:
If the corporation owns the credit card → deduction happens on the charge date.
If you personally own the card → the corporation can’t deduct the expense until it reimburses you.
So, if you want that deduction in 2025, make sure reimbursements hit before midnight on December 31.
5. Don’t Fear Taking “Too Many” Deductions
Many new business owners get nervous when deductions exceed income.
Don’t be.
If your business deductions are greater than your business income, you create a net operating loss (NOL)—which you can carry forward to reduce taxes in future years.
In other words, a loss now can become real money later.
Always track your deductions. Always claim what you’re entitled to. A tax loss is not a red flag—it’s a tool.
6. Leverage Your Qualified Improvement Property (QIP)
If you’ve made improvements to the interior of a non-residential building you own—think office spaces, retail stores, or commercial buildings—you may be sitting on a major tax opportunity.
Qualified Improvement Property (QIP):
Is classified as 15-year property
Qualifies for 100% bonus depreciation and Section 179 expensing
That means you can deduct the entire cost immediately rather than spreading it out over 39 years.
To take this deduction for 2025, the improvements must be placed in service by December 31.
Final Thoughts
Tax planning doesn’t have to be complicated. With the right strategies—and good timing—you can keep more money in your business where it belongs.
If you'd like to explore any of these deductions or see how they apply to your situation, we’re happy to walk you through it. Just give us a call.