As 2025 winds down, many high-income earners and entrepreneurs are asking the same question: What can I do before December 31st to reduce taxes, protect wealth, and set up for a strong 2026?
Whether you run a business, manage substantial investments, or both, the final weeks of the year offer some of the most valuable planning opportunities. Below, I break down key year-end strategies for high earners and business owners providing practical moves to make now, before the window closes.
What year-end strategies should individuals consider?
Think of this as the “clean-up and optimize” season for your financial life. A few key actions:
Harvest tax losses and rebalance portfolios. Trim under-performers to offset gains elsewhere and reset allocations while maintaining long-term targets.
Maximize retirement contributions. Fund 401(k)s, IRAs, HSAs, and backdoor Roths before the deadline. For high earners, consider a Mega Backdoor Roth or after-tax 401(k) strategy.
Accelerate charitable giving. If you plan to give, “bunch” donations into a single year for a bigger deduction or use a donor-advised fund (DAF) to get the deduction now and give later.
Review estate and gifting strategies. With the estate tax exemption close to $14 million per person, take this opportunity to gift assets or fund irrevocable trusts while limits are high.
Evaluate Roth conversions. If your income will drop in 2026 or after retirement, a conversion may make sense this year while tax rates remain low.
How can business owners lower taxes before year-end?
Business owners have unique levers to pull. The goal: reduce taxable income and build personal wealth at the same time.
Defer income, accelerate expenses. If you operate on a cash basis, pay year-end bonuses, equipment costs, or vendor bills before December 31st. Delay invoicing until January where possible.
100% bonus depreciation is back. Leverage bonus depreciation and Section 179 deductions so making qualified equipment purchases now can yield larger deductions.
Max out retirement plans. Solo 401(k)s, SEP IRAs, or even cash-balance pension plans allow substantial deductions for owners while funding retirement.
Review entity structure. With the Qualified Business Income (QBI) deduction set to continue, now’s the time to evaluate whether your S Corp, partnership, or C Corp setup is still the most tax efficient.
Consider a year-end profit-sharing contribution. It rewards your team and generates a deductible expense.
Are there overlapping strategies for individuals and business owners?
Definitely, and that’s where integrated planning shines.
Charitable giving through a business. Donating appreciated stock or company assets can reduce both corporate and personal tax exposure.
Family employment. Paying children legitimately involved in the business can shift income to lower brackets while funding Roth IRAs or 529 plans.
Health reimbursement or defined benefit plans. These can offer both tax advantages and meaningful employee benefits.
Business succession meets estate planning. Transferring ownership interests gradually or via trusts before 2026 can lock in today’s higher exemptions while aligning with long-term goals.
Beyond taxes, what strategic financial reviews should be done before year-end?
Investment review: Ensure portfolios align with risk tolerance, liquidity needs, and after-tax efficiency.
Insurance check-up: Review life, disability, and liability coverage to protect wealth and business continuity.
Cash flow planning: Reassess cash reserves, especially if interest rates shift or your business has cyclical income.
Succession and exit strategy: Begin planning now if a sale or transition is on the horizon within the next few years.
What are some mistakes taxpayers and business owners make at year-end?
Waiting until tax season. The most powerful strategies; gifting, depreciation, retirement funding, and charitable deductions require action before December 31st. Once the calendar flips, options shrink dramatically.
Not coordinating your financial professionals. Meeting with your CPA, financial advisor, or attorney individually helps but having them work together is far more effective. Choosing a firm that offers integrated tax, financial, and legal services ensures nothing falls through the cracks and your overall strategy stays aligned.
Any closing advice for the Valley's esteemed business and professional community?
The end of the year shouldn’t be about scrambling; it should be about strategy. High-income earners and entrepreneurs have more moving parts than ever: business income, investment gains, complex tax law, and estate considerations. A proactive year end strategy can create a seamless, tax-efficient plan that preserves wealth and prepares you for the next chapter.
If you don’t have someone to help you implement these strategies, or simply want a second opinion on your current plan, reach out for a complimentary consultation before year-end. Remember, November and December are for tax planning, while January is for tax preparation. The best results come from acting early, not after the year is over.
David J. Dobrusin is a Certified Public Accountant and Certified Financial Planner® specializing in integrated tax, financial planning, and investment management for entrepreneurs and high-net-worth families throughout the Valley.