Post–Year-End Tax Opportunities for 2025

The following article was provided by Whittlesey. It is reposted here with permission.

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Many people believe tax planning ends when the year closes. However, some of the best strategies remain available after year-end, often until you file your return.

Recent law changes shaped by the One Big Beautiful Bill Act also impact future planning, making now a great time to finalize 2025 decisions and prepare for 2026. 

Below is a practical overview of key post–year-end opportunities that can still reduce 2025 tax liability, followed by forward-looking strategies to help you prepare for the new year. 

Retirement, Health Savings Contributions 

You can still make several retirement and health-related contributions after year-end, which may give you valuable deductions: 

• You can fund Simplified Employee Pension Individual Retirement Account contributions up to the tax filing deadline, including extensions. This is especially helpful for sole proprietors, consultants, and business owners with variable income. 

• Solo 401(k) (also known as a one-participant 401(k)) and profit-sharing plans allow employers to make contributions after year-end, as long as the plan was set up by Dec. 31, 2025. With the right setup, these plans can offer large deferrals and deductions. 

• Cash balance plans can provide large deductions for 2025 if established by year-end, and you can fund them up to the extended filing deadline. Be sure to follow controlled group rules and consider how wages are structured. 

• You can fund Traditional and Roth Individual Retirement Accounts, as well as Health Savings Accounts, until April 15, 2026. This gives you more time to adjust your tax situation after the end of the year. 

Accounting Method Changes, Depreciation, Interest Deductions 

Reviewing your accounting methods after year-end can reveal opportunities that do not require you to file amended returns: 

• Business interest deductions under Internal Revenue Code Section 163(j) are now more favorable because OBBBA permanently restored the earnings before interest, taxes, depreciation, and amortization EBITDA–based limit starting in 2025. This change allows more deductions for many businesses with debt, but partnership calculations and permanent elections still need careful planning. 

• Businesses can recover missed depreciation deductions by making a Section 481(a) adjustment using Form 3115, Application for Change in Accounting Method. This covers items such as retroactive cost segregation, partial asset disposals, correcting repair versus capitalization issues, inventory expensing under Section 471(c), and removing fully depreciated “ghost assets.” 

• If your business qualifies, you may still be able to make a late S corporation election under Internal Revenue Service relief rules, possibly making it effective as of Jan. 1, 2025. 

It’s Not Too Late: Post–Year-End Tax Opportunities for 2025 

Individual, Pass-Through Planning Still Available 

There are still several last-minute elections and strategies available for individuals and business owners: 

• In some states, you can still make or fund pass-through entity tax elections until the extended deadline. These elections affect the state and local tax deduction cap, the qualified business income deduction, the alternative minimum tax, and the net investment income tax, so it is important to model the impact. 

• You can still use backdoor Roth strategies for 2025 by making a nondeductible IRA contribution and converting it to a Roth IRA. If you have other pre-tax IRA balances, be sure to consider the pro-rata rule to avoid unexpected taxes. 

Additional Elections, Credits Worth Reviewing 

When planning late in the year, you should also review special incentives and any previous elections you have made: 

• Section 179D energy-efficient commercial building deductions for qualifying designers and owners 

• Section 45L energy-efficient home credits for eligible homebuilders 

• Reassessment or revocation of legacy entity-level elections that may no longer align with current law or business goals 

Long-Term Structural Changes 

OBBBA kept several rules that benefit taxpayers, but changed how some of them work: 

• Individual tax rates, the standard deduction, and the QBI deduction are still available, but the thresholds and limits have changed, which could affect your planning. 

• Estate and gift tax exemptions are now permanently higher, expected to be between $13 and $15 million per person and adjusted for inflation. This change affects earlier “use-it-or-lose-it” gifting strategies, so it is a good time to review your trust and estate plans. 

Temporary Deductions with a Limited Planning Window 

Between 2026 and 2028, some deductions and exclusions offer special planning opportunities: 

• There is a senior deduction of up to $6,000 per eligible person. This can be especially useful when combined with Roth conversions and income-smoothing strategies. 

• Temporary exclusions or deductions are available for overtime premium pay, tip income, and personal auto loan interest. Each of these has income limits, reporting rules, and may interact with AMT and NIIT. 

Advanced Planning for High-Income Taxpayers, Business Owners 

OBBBA brings both new opportunities and new limits for higher-income taxpayers: 

• Capital asset expensing is now more generous, with permanent 100% bonus depreciation for qualifying property placed in service after Jan. 19, 2025. Section 179 limits are higher, and domestic research and development (R&D) expensing has returned. Timing and asset classification remain critical. 

• The SALT deduction cap increases to $40,000 through 2029, with phaseouts beginning at $500,000 of modified adjusted gross income (MAGI). This change affects itemization decisions and the value of PTET elections. 

• A new 35% cap on itemized deductions for top earners changes how deduction-bunching strategies work. Planning for charitable vehicles such as donor-advised funds and charitable remainder trusts should be revisited. 

• Remote work continues to increase multistate tax exposure, creating new considerations for nexus, payroll withholding, and pass-through entity compliance. 

Post–year-end planning is now a strategic opportunity, not just a cleanup task. By acting on what is still possible for 2025 and planning ahead for the new rules in 2026, you can stay flexible, lower your long-term tax bill, and avoid costly mistakes. 

CBIA and Whittlesey’s Feb. 4 webinar will dive into these strategies and how they apply to various situations.

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About the author: Brenden Healy is partner-in-charge of tax services in Whittlesey’s Hartford office. With over 25 years of experience in public accounting, Healy is a tax expert who consults with businesses and individuals and focuses his practice on manufacturing and distribution, retail industries, real estate, and nonprofit organizations.