Your Post-Labor Day Tax Planning Checklist

09/15/2025

The smell of freshly sharpened pencils is in the air, and the last of the summer BBQs are behind us. For most, Labor Day marks the unofficial end of summer. For us tax professionals, it’s the blaring siren that says, “It’s time to get serious about the new tax year.”

If you're a business owner or high-income individual, the fourth quarter is not just about finishing the year strong—it's about making strategic moves that will impact your tax liability for all of 2025.  Proactive tax planning can mean the difference between owing a significant amount to the IRS and a pleasant refund (or at least a much lower tax bill).

The end of the year is not a time for guesswork. It’s a time for action. Here’s a comprehensive checklist to help you get your house in order to make sure you maximize your tax savings.

1. Revisit Your Income and Projections

First things first, you need to know where you stand. The tax system is progressive, which means the more you earn, the higher your marginal tax rate on that additional income. You’ve had a solid three quarters of 2025 in the books, so now is the perfect time to forecast your total income for the year. This includes all sources—business profits, investment gains, side hustles, and any other income.

Knowing your projected income allows you to strategically manage what’s to come. Are you on the cusp of a higher tax bracket? For 2025, the thresholds have shifted slightly due to inflation adjustments. For instance, the 32% bracket now applies to single filers with taxable income over $197,300 and married couples filing jointly over $394,600. Understanding where you fall on the tax staircase is the first, and most crucial, step in effective tax planning.  (Not sure?  We can help! Click here to book a time.)

2. Maximize Retirement Contributions

This is, without a doubt, one of the most powerful tax-saving tools in your arsenal. The government is literally incentivizing you to save for your future, and a big part of that incentive is a current-year tax deduction.

• For Business Owners: If you have a business, you have a plethora of options. Consider a SEP IRA or a Solo 401(k). The contribution limits are substantial. For 2025, the SEP IRA contribution limit is $70,000, and a Solo 401(k) allows for a combined employee and employer contribution of up to $70,000. For high-income business owners looking to save a significant amount, a Defined Benefit Plan may even be an option, allowing for six-figure contributions.
• For Individuals: If you're an employee, make sure you're on track to max out your 401(k). For 2025, the limit is $23,500. If you're 50 or older, don't forget the catch-up contribution of $7,500. If you're a high-income earner, a traditional IRA contribution may not be deductible, but you can still use a backdoor Roth conversion strategy. A Roth IRA conversion allows you to pre-pay the tax now, so the money grows and is distributed completely tax-free in retirement.

3. Strategize Your Business Expenses and Investments

The fourth quarter is an excellent time to make planned purchases. Need new equipment, a vehicle for your business, or software? These can often be fully deducted in the year of purchase.

• Section 179 and Bonus Depreciation: The Section 179 deduction for 2025 allows you to deduct the full purchase price of qualifying equipment up to a limit of $1.25 million. This is a powerful tool to reduce your taxable business income. Additionally, bonus depreciation is still available, though it is phasing down. Be sure to understand how these provisions apply to your business before making any major purchases.
• Tax-Loss Harvesting: Have investment losses in your portfolio? Now is the time to sell those losing positions to offset your capital gains. You can use capital losses to offset any capital gains you have, plus up to $3,000 of ordinary income each year. Any unused loss can be carried forward to future years. This is a common strategy for high-income individuals and can significantly lower your tax bill.

4. Review and Adjust Estimated Payments

This is a common pitfall for small business owners and those with significant investment income. The IRS requires you to pay taxes throughout the year, not just at year-end. If you don't pay enough, you could face underpayment penalties.

Take a look at your income projections and the estimated tax payments you’ve already made. If you’re a business owner on a cash basis, consider timing your billings. If you’re a consultant, think about delaying invoicing on a project until January to defer the income into the next tax year. If you've had an unexpectedly good year, now is the time to make an additional estimated payment to avoid a surprise penalty when you file your return.

5. Get Smart with Charitable Contributions

Giving back is a great way to support causes you care about and get a tax benefit in the process. For those who itemize, charitable contributions are deductible.

A great strategy for high-income earners is to use a Donor-Advised Fund (DAF). You can front-load several years' worth of charitable donations into the DAF in 2025, take a large deduction this year, and then distribute the funds to your favorite charities over the next few years. This allows you to "bunch" your deductions into a single year, which can be a highly effective way to exceed the standard deduction.

6. Think Beyond Income: The Estate and Gift Tax Exemption

For our high-net-worth clients, the lifetime gift and estate tax exemption is a critical piece of the tax planning puzzle. For 2025, the exemption is $13.99 million per individual. The annual gift tax exclusion is also set to increase to $19,000. These are opportunities for tax-exempt wealth transfer. If you're a married couple, you can give up to $38,000 per recipient annually without touching your lifetime exemption. These are not just for the ultra-rich; they are strategies to be aware of if you are looking to transfer wealth to the next generation.

The end of the year is more than just a countdown to New Year’s Eve. It's a strategic window to take control of your financial future. Waiting until April can cost you thousands. Think of your tax plan like a ship—it’s much easier to adjust the sails mid-journey than to try to turn the entire boat around just before it hits the port.

This checklist is a starting point, but every financial situation is unique. Our job is to help you navigate the complexities of the tax code and find the legal, accurate ways to minimize your tax liability. Don't leave your tax situation to chance.

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Greg Tobias, Enrolled Agent

Admitted to practice before the Internal Revenue Service

Sources:

• Internal Revenue Service (IRS)
• Internal Revenue Code (IRC)
• Treasury Regulations
• IRS Publication 525, Taxable and Nontaxable Income
• IRS Publication 970, Tax Benefits for Education
• Revenue Procedure 2024-40 (for 2025 inflation adjustments)
• Tax Foundation, "2025 Tax Brackets and Federal Income Tax Rates"