As the 2025 tax season approaches, smart financial planning can lead to serious savings for small business owners. The IRS begins accepting returns on January 27, 2025, and the filing deadline for most taxpayers is April 15, 2025. Now is the time to prioritize your tax strategy and make sure you’re set up for success. If you need more time, you can request an extension to file until October 15, 2025, but any taxes owed are still due by the April deadline to avoid penalties and interest.
From optimizing your business structure to maximizing deductions, these tax tips can help minimize your liability and improve your financial outlook.
Reevaluate Your Business Structure for Tax Efficiency
Are you currently operating as a sole proprietorship, LLC, S corp, or C corp? While each business type has its own pros and cons, they can also significantly impact how you file your taxes and how much you owe.
For example, LLCs are pass-through entities, meaning profits are taxed as part of your personal income — potentially placing you in a higher individual tax bracket (up to 37%). In contrast, C corporations are taxed at a flat 21%, which may offer savings depending on your business income and growth.
If your business has scaled recently or your profits have increased, it may be time to consult with a tax advisor about restructuring.
Tip: Review your structure annually or whenever your revenue grows substantially.
Maximize Your Business Deductions
Small business owners are eligible for a variety of tax deductions — but knowing what qualifies is key. Here are common deductions to explore:
1. Work-Related Travel
- Airfare, hotel stays, car rentals, and per diem expenses for trips related strictly to business.
- Must be outside your standard business area.
2. Business Vehicle Use
- Full deduction if the vehicle is used exclusively for business.
- For mixed use, track mileage and expenses to claim the percentage used for work
3. Meals & Entertainment
- Must be directly related to business meetings or activities.
- Keep records: date, location, attendees, and business purpose
4. Phone & Internet Bills
- Deduct the business-use percentage of your phone or internet service.
- A separate work phone plan may simplify this.
5. Equipment, Software & Supplies
- Includes computers, desks, business software, and office tools.
- Subscriptions like industry-specific SaaS tools may also be deductible.
Don’t Wait — Start Planning Early
Waiting until April can leave you scrambling — or worse, facing penalties. Set reminders to prepare your documents early, schedule time with a tax professional, and make strategic decisions before the deadline.
At Republic Bank, we offer personalized support to help small businesses manage taxes, cash flow, and future growth. Contact Us or call 800-526-9127 to speak with a small business advisor today.
