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Tax Planning for Small Business: 20 Year-End Tax Deductions

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by

HLGVentures
in

10 Obvious + 10 Overlooked Ways to Lower Your Tax Bill Before December 31st.

As the year wraps up, many small business owners find themselves in a familiar spot — the books look good, maybe too good, and the question arises:
“What can I buy before year-end to lower my taxable income — and actually benefit my business?”

Whether you’re a solo entrepreneur, an LLC owner, or running a growing team, strategic spending before December 31st can make a big difference at tax time. The key is to invest in things that add long-term value — not just “spend to spend.”

Here are 20 smart ideas to help you make the most of your profits while staying IRS-compliant.

Tax Planning for Small Business: 20 Year-End Tax Deductions
Tax Planning for Small Business: 20 Year-End Tax Deductions

🧾 10 Common (and Still Smart) Tax Deductions

These are the tried-and-true purchases most small businesses consider each year — and for good reason. They keep you running efficiently and help build a strong foundation for the year ahead.

  1. Office Equipment – Printers, scanners, monitors, laptops, label makers, calculators… anything that keeps your day-to-day workflow smooth.
  2. Office Furniture – Upgrade that chair that’s been squeaking since 2020 or add a standing desk. Your back (and productivity) will thank you.
  3. Software & Subscriptions – Accounting software, project management tools, Adobe, Canva, CRM systems, or even your Zoom subscription — all deductibles. Going with an annual subscription usually gives you a discount as well.
  4. Business Insurance Premiums – Prepaying an annual policy this year can lock in a deduction for the current tax period.
  5. Marketing & Advertising – New website updates, social media ads, logo redesign, or professional photos for your brand.
  6. Professional Services – Bookkeepers (hi 👋), accountants, tax advisors, attorneys, or consultants.
  7. Continuing Education – Conferences, online courses, or certifications that improve your business skills — even if they happen next year.
  8. Employee Bonuses – Year-end thank-yous are deductible, and a great morale boost for your team.
  9. Inventory or Supplies – Stock up on materials you’ll need early next year — especially if you can buy in bulk at year-end discounts.
  10. Maintenance & Repairs – Fix that slow computer, update your POS system, or repair business property or vehicles.

💡 10 Often Overlooked (But Brilliant) Tax Deductions

These are the creative or lesser-known ways to reinvest in your business that many owners forget to consider:

  1. Prepaid Rent or Utilities – Paying January’s bills in December can help reduce taxable income this year.
  2. Security Systems – Physical security (cameras, locks) or digital (cybersecurity tools, antivirus software, secure backups).
  3. Website Overhaul – Redesign, SEO work (check out the JunctionJack app for access to vetted SEO experts!), or improved functionality count as marketing or technology expenses.
  4. Charitable Donations – Cash donations or donated goods/services can often be deducted if your business qualifies.
  5. Retirement Contributions – SEP IRA, Solo 401(k), or other plans can significantly lower your taxable profit.
  6. Vehicle Upgrades or Maintenance – Especially for vehicles used for deliveries, service calls, or client visits.
  7. Client Appreciation Gifts – Up to $25 per client is deductible (consider branded or meaningful items).
  8. New Business Signage – Indoor/outdoor signs, trade show displays, banners — all great marketing deductions.
  9. Energy Efficiency Improvements – LED lighting, insulation, or even solar panels can qualify for deductions and credits.
  10. Memberships or Networking Dues – Chamber of Commerce, local networking groups, or professional associations that keep you connected.

✨ Spend with Intention

Before you make any large purchases, take a moment to plan. Ask yourself:

  • Does this expense directly support my business goals?
  • Will it improve efficiency, productivity, or visibility?
  • Can I document it clearly if the IRS asks for proof?

Strategic year-end spending isn’t about splurging — it’s about aligning your money with your mission.

💼 Small Business Tax Deductions

Not every expense will qualify as a deduction for every business structure. Check with your bookkeeper or tax professional before making major investments — they can help you navigate rules like Section 179 expensing (which allows immediate deductions on certain big purchases, like vehicles or heavy equipment).

And remember it’s not too early to start planning for next year’s taxes now. It’s also a great time to work on next year’s budget! I am happy to help with budgets!

more2heather@gmail.com | (206) 227-6128