3 Tax Moves Entrepreneurs Need to Make Before 2025 Ends

The clock is ticking for traders to take full advantage of the new tax law changes. With a Big Beautiful Bill Act introducing significant updates, there’s never been a better time to rethink your tax strategy.

Here are three steps I recommend every entrepreneur take in the fourth quarter.

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1. Review your entity structure

Choosing the wrong entity structure is the single biggest mistake I see investors and entrepreneurs make. Fortunately, these errors are not irreversible. In fact, I’ve seen traders save $100,000 or more just by making one strategic change. With recent changes in tax law, reviewing this fundamental part of your business is more important than ever.

The government taxes your business in one of three ways:

• As a corporation (either a C corporation or an S corporation)
• As a partnership (general or limited)
• As a sole proprietorship

The right choice depends on how you run your business, how you pay yourself and whether you’re reinvesting profits or taking regular withdrawals.

AC Corporation is a great option for entrepreneurs who invest money in their business. The corporate tax rate is only 21%, which is significantly lower than most personal income tax rates, and is set to remain that way permanently.

If, like many small business owners, you need to draw income from your business, a C corporation is likely not your best choice. First, the corporation will pay tax at a rate of 21 percent. After that, you will essentially pay double tax by paying your own income tax rate on any distributions you receive.

For entrepreneurs who regularly take money out of their business, pass-through entities, including sole proprietorships, partnerships and S corporations, are often better choices. These entities “pass through” their income to the owner’s personal tax return, avoiding C corporation double taxation.

The new tax law included a major win for pass-through corporations by making the 20% deduction for qualified business income permanent. However, the QBI deduction has some important limitations. It’s tied to the wages paid by the business and in stages for higher earners, so you’ll need to work with your CPA or tax advisor to make sure your business is structured and operated in a way that maximizes your profits.

Before the end of the year, review all of your taxable entity structures with your CPA. There is time to make adjustments if needed, and even to add new entities if it makes sense for your goals.

2. Use bonus depreciation strategically to maximize tax savings

Bonus depreciation is a powerful tool used to encourage governments to invest in certain assets. This allows businesses to deduct a larger portion of the purchase price of qualifying assets rather than spreading the deduction over the asset’s useful life.

Before President Trump signed a big handsome bill into law on July 4, bonus depreciation was only 40 percent in 2025 and sunset in 2027. In some great news for entrepreneurs in the legislation, a 100% bonus depreciation has been put in place after January 19th for qualifying property acquired and placed in service.

If you’ve invested in real estate, bonus depreciation becomes even more valuable when paired with cost segregation.

With a proper cost-to-separation analysis, you may be able to get 100% bonus depreciation on parts of your property that have a short useful life. This can give you a massive tax deduction in the year you buy the property, creating significant tax savings that you can use on other investments.

I work with a lot of real estate investors through my tax education company, Wealthability®, and I’m constantly amazed at the number of people who avoid cost segregation because they think it will cause problems with the IRS. This is simply not the case. When done correctly, cost segregation allows you to properly depreciate your real estate investment.

Be sure to work closely with both your tax advisor and cost segregation expert. You want to make sure the analysis is done properly and make sure to minimize your taxable income as much as possible without creating an excessive net operating loss that you won’t be able to use to offset future income. Starting before the end of the year gives you more time to strategically plan your future purchases and deductions for 2025, 2026 and beyond.

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3. Look closely at your state and local income taxes

Since the passage of the Tax Cuts and Jobs Act of 2017, entrepreneurs living in high-tax states have felt the pain of a $10,000 cap on state and local tax deductions.

Thanks to new tax legislation, entrepreneurs can take a SALT deduction in 2025, depending on their modified adjusted gross income. The deduction will increase to $140,400 per year in 2026 and 1% per year until 2030, when it will drop back to $10,000. This is a welcome change, but it still requires careful analysis to ensure you pay the least amount of tax you must.

When the federal government reduced the SALT deduction, nearly all states created “works” with income taxes that allowed pass-through entities to pay state taxes at the entity level, so state taxes could be deducted as business expenses, like corporations could.

Since these jobs are still available, you’ll want to rerun your numbers to make sure you’re making the most choices this year. Depending on your personal tax situation, working may still give you a better benefit than the salt deduction.

Your Q4 Action Items

Be sure to thoroughly review your tax strategy and make necessary adjustments over time to enjoy all the benefits of recent tax law changes. Schedule a meeting with your CPA or tax advisor to review these three points as well as your overall tax strategy. Ask them to run all the numbers so you can make an informed decision. And, of course, include your short- and long-term business and personal goals in your analysis.

By prioritizing this work in the fourth quarter, you’ll set yourself up for maximum financial success both this tax year and for years to come.

The clock is ticking for traders to take full advantage of the new tax law changes. With a Big Beautiful Bill Act introducing significant updates, there’s never been a better time to rethink your tax strategy.

Here are three steps I recommend every entrepreneur take in the fourth quarter.