Key Strategies for Business Owners

Many tax provisions introduced under the Tax Cuts and Jobs Act (TCJA) are set to expire at the end of 2025. These changes could have significant financial implications for business owners. Now is the time to assess your tax strategy and prepare for potential shifts in tax policy.

Here are key areas to review as you plan for the future:

1. Evaluate Your Business Structure

With possible increases in individual tax rates on flow-through income, it’s essential to reassess whether your current business structure—C-Corporation, S-Corporation, LLC, Partnership, or Sole Proprietorship—is still the best fit for your tax situation. The right structure can help minimize your tax liability and optimize financial efficiency.

2. Review Your Qualified Business Income (QBI) Deduction

Pass-through entities, such as LLCs, partnerships, and S-Corporations, currently benefit from a 20% QBI deduction. However, if this deduction expires, business owners may face a higher tax burden. Evaluating alternative strategies now can help mitigate potential tax increases.

3. Prepare for Expiring Individual Tax Provisions

Many individual tax provisions will sunset, including lower personal income tax rates and the $10,000 cap on the State and Local Tax (SALT) deduction. If you report business income on your personal tax return, these changes could directly impact your tax liability.

4. Optimize Operations to Reduce Costs

With the potential for higher taxes, it’s wise to explore cost-saving strategies. Investing in automation and streamlining operations can improve efficiency while maintaining quality service—especially for customers who may be costly to serve.

Take Action Now

The tax landscape is shifting, and proactive planning is key. Working with a tax professional can help you navigate these changes, optimize your tax strategy, and ensure your business remains financially strong.

At Gleason Tax Advisory, we’re here to help you stay ahead of the curve. Contact us today to discuss how upcoming tax changes could impact your business and what steps you can take to prepare.