As 2025 winds down, here are some ideas to help you prepare for filing your upcoming tax return:

• Informational returns. Identify all vendors who require a 1099-MISC and a 1099-NEC. Obtain tax identification numbers (TINs) for each of these vendors if you have not already done so.
  
  
• Form 1099-K planning. Consider labeling business and personal accounts separately on platforms like Venmo and PayPal. Mixing funds could cause reporting errors, especially as platforms enhance their 1099-K tracking capabilities.
  
  
• Be prepared for overtime and tip headaches. While 2025 is a transition year before the tax-free tip and overtime income must be reported on reformatted W-2s and 1099s, your employees still need to prove their deduction! So be prepared to track both tips and overtime pay from your payroll system.
  
  
• Shifting income and expenses. Consider accelerating income, or deferring earnings, based on profit projections.
  
  
• Separation of expenses. Review business accounts to ensure personal expenses are not present. Reimburse the business for any expenses discovered during this review.
  
  
• Create expense reports. Having expense reports with supporting invoices and business credit card statements with corresponding invoices will help substantiate your deductions in the event of an audit.
  
  
• Fixed asset planning. Section 179 or bonus depreciation expensing versus traditional depreciation is a great planning tool. If using Section 179, the qualified assets must be placed in service prior to year-end.
  
  
• Leveraging business meals. Business meals with clients or customers are 50% deductible. Retain the necessary receipts and documentation that note when the meal took place, who attended and the business purpose on each receipt.
  
  
• Charitable opportunities. Consider any last-minute deductible charitable giving including long-term capital gain stocks.
  
  
• Cell phone record review. Review your telephone records for qualified business use. While expensing a single landline out of a home office can be difficult to deduct, cell phone use can be documented and deducted for business purposes.
  
  
• Inventory review. Review your inventory for proper counts and remove obsolete or worthless products. Keep track of the obsolete and worthless amounts for a potential deduction.
  
  
• Review your receivables. Focus on collection activities and review your uncollectible accounts for possible write-offs.
  
  
  

Review your estimated tax payments. Recap your year-to-date estimated tax payments and compare them to your forecast of full year earnings. Then make your 2025 4th quarter estimated tax payment by January 15, 2026.