Mid-Year Tax Tune Up: 10 Smart Moves for Small Business Owners & High‑Net‑Worth Individuals
Midyear is the perfect time to take a step back, review your financial picture, and make adjustments that can lead to big tax savings. Waiting until year-end often means missed opportunities, rushed decisions, and limited options.
Below are 10 practical, high-impact steps to help you reduce your tax burden, strengthen your financial position, and finish the year strong—whether you run a small business or manage a complex personal portfolio.
1. Review Your Year‑to‑Date Numbers
Why it matters: Under‑ or over‑estimating income can trigger IRS penalties or missed savings.
Compare actual income to your budgeted figures and adjust Q3/Q4 estimated tax payments.
Review expenses to ensure you’re capturing all ordinary, necessary deductions like software, office supplies, and professional fees.
2. Evaluate Your Business Structure
Why it matters: Your entity type impacts your taxes, liability, and long‑term strategy.
Ask: Is my current LLC, S Corp, or C Corp structure still the right fit?
If you’re an S Corp, ensure your salary vs. distributions are properly balanced for payroll tax savings and IRS compliance.
3. Max Out Retirement Contributions
Why it matters: Contributions reduce taxable income and build long‑term wealth.
Plan now for Solo 401(k) or SEP IRA contributions to avoid a year‑end crunch.
If you’re 50+, take advantage of catch‑up contributions.
4. Monitor Your QBI Deduction
Why it matters: Pass-through entities can claim a 20% deduction on qualified income.
Check if you're near income phase-out thresholds.
Consider adjustments, such as modifying owner compensation or implementing a retirement plan, to retain your deduction.
5. Run a Midyear Tax Projection
Why it matters: Forecasting helps you stay ahead of surprises and avoid penalties.
Estimate full-year income, deductions, and credits.
Update your Q3/Q4 estimated tax payments.
Use the “safe harbor” rule: pay 100% of last year’s tax (or 110% if income is higher) to avoid penalties.
6. Use Bonus Depreciation
Why it matters: You can deduct the full cost of certain business purchases right away instead of spreading it out over years.
The law now allows 100% bonus depreciation for assets placed in service after January 19, 2025
This applies to equipment, software, furniture, and certain building improvements.
Even used items qualify if placed in service this year.
7. Plan Your Charitable Giving
Why it matters: Strategic timing can increase your deduction.
Consider bunching donations into a single year to exceed the standard deduction.
Use donor-advised funds to get the deduction now and support charities later.
8. Check Payroll & Benefit Compliance
Why it matters: Avoid penalties and ensure you're maximizing tax‑advantaged benefits.
Test your 401(k) or other plans now to correct any nondiscrimination issues.
Encourage HSA contributions for tax-free medical savings.
9. Use Your Annual Gift Exclusion
Why it matters: You can transfer wealth tax-free.
Give up to $18,000 per recipient in 2025 without triggering gift tax.
Review and update estate documents, including wills, trusts, and beneficiaries.
10. Schedule Your Midyear Tax Review
Why it matters: Acting now gives us time to adjust and optimize your tax strategy.
Let’s meet to course‑correct and lock in opportunities before year‑end.
We’ll build a simple, effective plan tailored to your business and financial goals.
Let’s Make the Second Half Count
Taking action now can lead to major savings and fewer headaches at year-end. Whether you're looking to reduce taxes, plan for growth, or get ahead of changes, a midyear review puts you in control.
Ready to get started?
Schedule your midyear tax planning session today and set yourself up for a stronger finish to the year.
Have questions? Reach out to michael@bottalacpa.com — I'm happy to help.