Q4 Tax Moves That Could Save You Thousands
Lock in deductions and credits now — before the year-end scramble begins.
Q4 is when smart owners stop hoping for a good tax result and start engineering one. 2025 is unusually rich with opportunities: the One Big Beautiful Bill Act (OBBBA) reshaped parts of the code mid-year; inflation adjustments nudged key thresholds higher; and several incentives have hard use-it-or-lose-it deadlines before New Year’s (and in one case, before September 30).
Below is a tightly curated playbook you can execute this quarter—with numbers, deadlines, and examples so you can translate strategy into savings.
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What changed in 2025 (so you can exploit it in Q4)
Tax brackets & standard deduction rose modestly. The top 37% bracket kicks in above $626,350 (single) / $751,600 (MFJ). Standard deduction: $15,000 (single) / $30,000 (MFJ) / $22,500 (HoH). (IRS)
OBBBA added new personal deductions (big if you or family members work W-2 alongside your business): tips, overtime, and personal auto loan interest deductions for 2025-2028, plus a $6,000 senior deduction (in addition to the normal senior add-on). (IRS)
SALT cap increased: up to $40,000 (with a phase-down starting around $500,000 MAGI) for 2025–2029—opening itemization strategies again in high-tax states. (Bipartisan Policy Center, Arnold & Porter)
Bonus depreciation is back to 100% for qualifying assets acquired and placed in service after Jan 19, 2025—no phase-out. That’s a game-changer for Q4 capex. (Congress.gov)
Clean vehicle credits (new, used, and commercial) end after Sept 30, 2025. If you need an EV for the business or personally, the purchase clock is ticking. (Arnold & Porter)
The Q4 moves
1. Front-load capex to lock 100% bonus depreciation
If you’re buying machinery, computers, furniture, equipment, or doing cost-seg on improvements, place assets in service by 12/31/2025 and make sure they meet the post-Jan-19 acquisition rule. A $500,000 machine placed in service in December yields a $500,000 deduction in 2025 under bonus depreciation, versus spreading it over years. Review binding contract dates to ensure “acquired” status aligns with the law’s effective date, and coordinate with cost segregation on improvements. Why now: cash tax savings + stronger EBITDA optics (deduction doesn’t reduce EBITDA).
When to use §179 instead: If your state decouples from bonus, if you want to target assets (and not all), or to avoid NOLs on pass-through owners. For 2025, §179 max is $1,250,000, phasing out after $3,130,000, with a $31,300 SUV cap. (IRS)
2. Exploit the SALT cap jump—but mind the phase-down
With the cap lifted to $40,000, bundle property tax payments and state estimated taxes into 2025, where they matter again. If you’re a pass-through in a PTE-tax state, model entity-level tax vs. individual SALT deduction now that itemizing may be back on the table. Caveat: high-income filers (around $500,000 MAGI and up) see the higher cap reduced toward $10,000, so don’t over-bunch if you’ll be phased down. (Bipartisan Policy Center, Arnold & Porter)
3. R&D expensing is restored—harvest 2025 and catch up prior years
OBBBA reverses §174 capitalization for domestic R&D beginning in 2025 and provides catch-up mechanics for costs you capitalized in 2022–2024. Action items: identify qualifying wages/contract research/supplies, scrub for dual-purpose expenses, and evaluate whether to amend or claim via current-year adjustments. Cash impact can be six figures for modest dev teams. (Coordinate with §41 credit documentation.) (Kaufman Rossin Multisite Website, DHJJ)
4. Max out tax-advantaged savings (bigger limits this year)
401(k) employee deferral $23,500; catch-up $7,500; special age 60–63 catch-up $11,250 (SECURE 2.0). Defined-contribution overall limit $70,000. If you own the company, confirm the plan document allows profit-sharing by year-end. (IRS)
IRA stays $7,000 plus $1,000 catch-up (age 50+). SEP-IRA limit $70,000. (IRS)
HSA: $4,300 (self-only) / $8,550 (family); HDHP minimum deductible $1,650 / $3,300; OOP max $8,300 / $16,600. Fund by April 15, 2026, but plan now so you don’t leave cash on the table.
Why entrepreneurs should care: pre-tax deferrals reduce QBI phase-outs, often improving your §199A deduction while compounding long-term wealth.
5. Tune owner payroll with the 2025 Social Security wage base
For S-corps, pay reasonable comp—then consider whether it’s worth pushing W-2 up to the $176,100 OASDI base (12.4% combined SE tax equivalent) to maximize retirement contributions, or keep wages lean and distribute profits. In Q4, you can right-size remaining payroll and document the comp analysis. (Social Security)
6. EV credit last call (and the new auto-loan-interest deduction)
If an EV fits your fleet or personal life, you generally must acquire by Sept 30, 2025, to claim the federal credit (new/used/commercial). After that, it’s gone under OBBBA. On the flip side, personal auto loan interest (new U.S.-assembled vehicles) is deductible up to $10,000 per year from 2025–2028—handy where you can’t claim business interest. Run the math both ways before you buy. (Arnold & Porter, IRS)
7. Accountable plan cleanup + mileage reimbursement
Reimburse owner/employees under an accountable plan at the IRS rate—70.0¢/mile in 2025—to move expenses off payroll and avoid W-2 tax. Don’t “gross up” or round; keep odometer logs and purpose. (IRS)
8. Use the safe-harbor to avoid underpayment penalties
Q4 is where penalties bite. To stay penalty-proof, ensure total 2025 payments equal 100% of 2024 tax (110% if last year’s AGI > $150k), or 90% of 2025 tax. If you’re behind, increase year-end payroll withholding (unlike estimates, withholding is treated as paid ratably all year). (IRS)
9. Engineer your §199A (QBI) outcome
OBBBA made §199A permanent, but phase-outs and W-2/UBIA tests still rule the day. Push Q4 levers—retirement contributions, HSA, timing of bonuses, and entity-level taxes—to lower taxable income into the sweet spot and to meet the W-2 wage test if needed. (Expect IRS guidance to update examples and thresholds; build a buffer.) (Covington & Burling)
10. Charitable alpha: bunching + appreciated assets
With SALT itemization back for many, drop appreciated stock into a DAF in December, then grant over 2026. You’ll avoid capital gains and stack deductions in a single year. Pair with state tax timing to clear the itemization hurdle efficiently.
2025 numbers you’ll actually use
Quick implementation checklist, the “do it this week”
Capex calendar: Confirm delivery/installation dates so assets are “in service” by 12/31 and acquired post-Jan-19; get cost-seg vendor queued. (Congress.gov)
State tax timing: Re-project SALT itemization with the $40k cap; schedule property‐tax + state estimates; re-evaluate PTE elections. (Bipartisan Policy Center)
Retirement pushes: Max deferrals; finalize employer profit-sharing; consider solo-401(k)/cash balance setups if feasible; harvest the age 60–63 catch-up. (IRS)
R&D file sweep: Tag 2025 domestic §174 costs and prep documentation to expense; map any catch-up plays. (Kaufman Rossin Multisite Website)
Vehicles: If an EV purchase is on deck, close before Sept 30; otherwise, price financing to leverage the auto-interest deduction (personal) vs. business interest (Schedule C/E). (Arnold & Porter, IRS)
Payroll & penalties: Adjust Q4 payroll to hit the safe harbor and align S-corp wages; set or refresh your accountable plan at 70.0¢. (IRS)
Two realistic case studies
Case A — $2.4M revenue e-commerce S-corp in TX
Buys $380k of automation gear delivered Dec 10 → $380k immediate deduction via 100% bonus; state conforms.
Owner raises deferral to the max and adds $30k profit-sharing to clear a QBI wage threshold, boosting §199A by ~$7,000.
SALT not relevant; shifts to accountable plan reimbursements and mileage for two owner-employees.
Net effect: ~$120k reduction in 2025 taxable income; cash tax saved ≈ $28k–$35k depending on bracket. (Modeled at 32–35% blended.)
Case B — $5.1M gross receipts multi-location restaurant (LLC) in CA/NY
SALT cap now $40k: bunches property tax and final two state estimates to itemize; reduces reliance on PTE tax.
Places $600k kitchen and HVAC improvements in service Dec 20; section 168 bonus at 100% after cost-seg turns most categories into short-life property.
Many employees claim tip and overtime deductions personally; the owner updates onboarding and W-2 coding to ensure info returns support staff deductions.
Net effect: greater itemized deductions at the owner level; six-figure 2025 depreciation; happier staff retention through take-home pay lift. (Bipartisan Policy Center, Congress.gov, IRS)
The delta between “file and hope” and Q4 engineering is often five figures—sometimes six. The window is open, but parts of it slam shut on 12/31 (and EV credits on 9/30). If you want, I can turn this into a one-page action plan specific to your entity stack and state mix—say the word.
Disclaimer: This is general information, not legal or tax advice. Model state conformity, PTE taxes, and entity specifics before acting.