5 Smart Tax Strategies for Small Businesses in 2025

Carla Alviso
Jul 7
2 min read

As a small business owner, you're constantly juggling clients, operations, and growth, tax planning, which shouldn’t add to the stress. With new rules and shifting legislation in 2025, staying proactive is crucial. Here’s what you need to know:

1. Maximize Business Entity Optimization

If you haven’t considered switching from a sole proprietorship or LLC to an S-Corporation, now is the time. Business owners with at least $50K in annual profit can significantly reduce self-employment taxes by paying themselves a reasonable salary and taking the rest as distributions. This strategy can save thousands each year.

Why it matters: You keep more of your earnings while maintaining compliance.

2. Use 100% Bonus & Section 179 Depreciation

Current tax laws allow you to write off the full cost of qualifying equipment in the year it’s purchased. This includes everything from office technology to vehicles used for business.

Pro tip: Time your equipment purchases strategically to maximize your deductions.

3. Take Advantage of Expanded Tax Credits

2025 has brought expanded credits for hiring and innovation. Small business owners can now more easily access the Work Opportunity Tax Credit (WOTC) and R&D credits, especially beneficial if you're hiring veterans or investing in product development.

Don't miss out: These credits could add up to thousands in savings.

4. Build a Quarterly Tax Calendar

Avoid surprises at tax time by creating a calendar for quarterly estimated payments, retirement contributions, and other key deadlines. Staying on top of due dates improves cash flow and prevents penalties.

Best practice: Set reminders or work with your CPA to automate alerts.

5. Embrace Digital Compliance & Record-Keeping

With the IRS increasing its digital reporting requirements, reliable record-keeping has never been more important. Using tools like QuickBooks, Keeper, or other accounting platforms can make monthly reconciliation and audit preparation much easier.

Peace of mind: Good records mean smoother audits and faster returns.

Why These Strategies Matter

Save money now with smart entity selection and equipment write-offs
Reduce audit risk with consistent digital record-keeping
Plan for growth by mapping out deductions and deadlines

Partner with Alviso CPA PLLC

Tax complexity is increasing, but you don’t have to navigate it alone. At Alviso CPA, we provide proactive, year-round tax planning tailored to your goals. Our services include: