In this webinar recap, we share key insights from our recent session on proactive mid-year tax planning for business owners and real estate investors. Our Director of Tax Planning, Matt Schumacher, and Tax Manager Nathan led the discussion and walked through practical strategies that can still impact your 2025 tax liability, improve cash flow, and support long-term financial goals.

If there’s one message to remember, it’s this: after December 31, your tax professional can only record history. Right now, you still have time to shape the outcome. Book a complimentary tax strategy consultation with our team to identify opportunities and take action before year end.

Why Mid-Year Tax Planning Matters for Business Owners

Many business owners think about taxes only when filing time arrives. Effective tax planning works differently. It requires an ongoing process that aligns your financial decisions with your tax strategy throughout the year.

When you review year-to-date financials before the end of the third quarter, you can project income and identify potential tax exposure. That visibility gives you time to act. Some strategies require financing, administrative setup, or changes to payroll or retirement plans. If you wait until the fourth quarter or later, you may lose valuable options.

Proactive planning improves cash flow, reduces surprises, lowers audit risk, and helps your business stay flexible as it grows.

Start With the Foundation: Accurate Bookkeeping

One of the most overlooked tax strategies is also one of the most effective. Real-time bookkeeping enables strong tax planning.

When your records stay current and properly categorized, you and your advisor can spot opportunities early and capture every eligible deduction. If bookkeeping falls behind, reconstructing transactions months later becomes difficult, and businesses often miss deductions.

Cloud-based systems such as QuickBooks Online or Xero give you real-time visibility into profitability and connect directly to bank and credit card accounts. For most businesses, reliable accounting software supports better decisions and better tax outcomes.

Equipment Purchases and Bonus Depreciation

Strategic equipment purchases can significantly reduce taxable income.

Current bonus depreciation rules allow businesses to deduct the full cost of qualifying equipment in the year the asset enters service. Eligible assets include vehicles, machinery, and certain leasehold improvements.

You can finance the purchase, but you must place the asset in service before year end. For vehicles, the deduction depends on the percentage of business use, so you should maintain a detailed mileage log.

Because timing and documentation matter, review major purchases with your tax advisor before moving forward.

Entity Structure and S Corporation Opportunities

Your entity structure determines how the IRS taxes your business income, and the right structure can create meaningful savings.

Many businesses start as sole proprietorships, where the owner pays self-employment tax on all net income. As profits grow, an S corporation election may reduce payroll tax exposure.

With an S corporation, the owner receives a reasonable salary subject to payroll taxes, while additional profits can flow through as distributions that avoid self-employment tax. The salary must reflect industry standards and actual responsibilities, and the business must run proper payroll.

Because this strategy involves elections, compliance, and ongoing administration, you should work with a qualified advisor.

Retirement Plans That Reduce Taxable Income

Retirement contributions offer one of the most effective ways to lower current taxes while building long-term wealth.

Business owners often choose between a SEP IRA and a Solo 401(k). A SEP IRA allows contributions of up to about 25 percent of business earnings. A Solo 401(k) may allow higher total contributions by combining employee deferrals with employer contributions.

Each plan has different rules, especially if you employ staff, so the right option depends on your structure and goals.

Real Estate Strategies for Investors

Real estate investors can reduce taxes significantly with the right planning.

Short-term rentals may qualify as active business activities when the owner materially participates in operations. A cost segregation study can then break the property into shorter-life components, allowing accelerated depreciation and potentially large first-year deductions.

These strategies require planning time. Owners must document active participation through tasks such as guest communication, maintenance coordination, and supply management.

When selling property, investors can use a 1031 exchange to defer capital gains by reinvesting in another qualifying property. The IRS requires strict timelines, including a 45-day identification period and a 180-day closing window.

The Augusta Rule and Accountable Plans

Two lesser-known strategies can improve tax efficiency and cash flow.

The Augusta Rule allows homeowners to rent their primary residence to their business for up to 14 days per year without reporting the income personally. The business can deduct the expense when it pays fair market value and maintains proper documentation.

Accountable plans allow businesses to reimburse owners for legitimate business expenses such as home office costs, internet, mobile phones, and mileage. These reimbursements remain tax-free to the owner and deductible for the business, as long as the plan is written and applied consistently.

Estimated Taxes and Cash Flow Planning

Quarterly estimated payments help business owners avoid penalties and manage cash flow throughout the year.

Because tax strategies can change projected income, you should review estimated payments regularly instead of setting them once and forgetting them. A proactive advisor can help you adjust payments as your performance and planning decisions evolve.

Tax Planning Is Not Just for Large Businesses

Many people believe only high-income taxpayers benefit from proactive tax planning. In reality, any business owner or investor who makes significant financial decisions should evaluate the tax impact in advance.

Whether you purchase equipment, change your entity structure, invest in real estate, or increase retirement contributions, the right strategy can improve long-term financial results.

The Key Takeaway: Timing Creates Opportunity

Many strategies require time, documentation, or access to capital. When you act too late, you reduce their effectiveness or lose the opportunity entirely.

Mid-year and third-quarter planning meetings give you time to review your financial position, evaluate your options, and make informed decisions before the year ends.

Find Out If You Are Leaving Money on the Table

Every business and investment situation is different. A personalized review helps identify missed deductions, structural improvements, and planning opportunities.

We offer a complimentary tax strategy consultation focused on clarity and practical guidance. During the session, we review your current structure, identify potential savings opportunities, and outline a forward-looking plan so you can make confident, tax-efficient decisions.

If you want to keep more of what you earn and build long-term wealth strategically, now is the time to start the conversation.