Last-Minute Tax Strategies Small Business Owners Can Use Before April 15

Tax season is in full swing, and the April 15th deadline is quickly approaching.

Most business owners assume that once the calendar flips to January, their opportunities to lower last year’s tax bill are gone. In reality, there still are several moves you can make before filing your return. These moves could meaningfully reduce your tax liability and strengthen your long-term plan.

Maximize Retirement Contributions

A key opportunity is employer retirement plan contributions. While salary deferrals to an employer plan must be made by December 31st, employer contributions are subject to different rules. If your business has a 401(k) with profit sharing, you can generally make contributions until the tax deadline, including extensions. This allows you to still contribute and reduce taxable income for the year.

Businesses without a plan may still be able to start one for the previous year. You can open and fund a SEP IRA for 2025 until April 15, 2026, or your tax extension deadline. You can contribute up to 25% of compensation or $70,000, whichever is lower, creating a significant deduction and building retirement savings.

Claim Missed 401 (k) Startup Tax Credits

Businesses that recently started a retirement plan may be eligible for tax credits. Many are surprised by how generous these are—and by how few claim them. A 2025 study by the National Bureau of Economic Research found that fewer than 6% of eligible firms claimed the retirement plan startup credit. The same study found 72% of small businesses without a plan were unaware of these credits.

If your company started a 401 (k) within the past three years, there is a good chance that you might qualify. For qualifying employers, here are some of the tax credits they can claim:

• 401 (k) startup tax credit
• 100% of qualified plan startup costs for employers with less than 50 employees, 50% for employers with 51-100 employees
• Maximum of $5000 per year for 3 years
• Employer 401 (k) contribution credit (reduced if 51-100 employees)
• Up to $1000 per employee earning less than $100k
• Phases out over 5 years
• Year 1: 100%
• Year 2: 75%
• Year 3: 50%
• Year 4: 25%
• Year 5: 0%
• Auto-enrollment tax credit
• $500 per year for 3 years on 401 (k) and 403b plans, where employers add automatic enrollment
• Most new plans started in 2025 or later must include automatic enrollment, which triggers eligibility for the credit
• Military Spouse participation credit
• Employers with fewer than 100 employees who allow immediate plan eligibility and accelerated vesting for military spouses
• $200 per military spouse, plus $300 in employer contributions per spouse
• Maximum of $500 per participating spouse per year for up to 3 years

Prior Year Funding of an HSA

Health Savings Accounts (HSAs) are another last-minute opportunity often overlooked. With a qualified high-deductible health plan, you can contribute until April 15, 2026. HSA limits for 2025 are $4,300 for individuals and $8,550 for families, plus a $1,000 catch-up if you’re 55 or older.

HSAs remain one of the most tax-efficient savings tools available. You get a deduction on your taxable income when you contribute. They grow tax-free and are tax-free when used for qualified medical expenses.

You can invest some of the funds and let this grow for long-term healthcare savings. After age 65, you can use the funds for any purpose penalty-free, only paying regular income tax (like an IRA) if used for any non-medical purposes.

Common Overlooked Deductions

Unfortunately, you cannot make new deductible purchases for 2025 at this point. However, you can review and organize your past expenses to ensure you are maximizing every allowable deduction under the IRS code. Here are examples of often missed or misunderstood deductions:

• Home Office Expenses (if you qualify)
• Vehicle Expenses or Mileage for Business Use
• Business Meals (50% deductible under current rules)
• Professional development and education
• Business insurance premiums
• Association Dues
• Journal Subscriptions
• Travel Expenses
• Phone and Internet Expenses
• Self-Employment Taxes

For many small business owners, focusing on operations means relying on tax preparers. However, this often leaves planning opportunities on the table. As the 2025 window closes, act on these strategies to maximize your tax outcomes.

Take control of your tax strategy—reach out today to schedule your strategy session. Seize every opportunity and position yourself for a stronger financial future. Contact us now to maximize your savings and plan confidently for next year.

David Drumhiller, CFP®, BFA™, AAMS® is a financial advisor with nearly 20 years of experience helping individuals and families prepare for retirement. He specializes in tax-efficient retirement income planning and comprehensive wealth strategies. David holds Series 7 and 66 registrations and is licensed in WA, OR, and ID. A Washington State University graduate, he lives in Pullman with his wife and enjoys travel, barbecue, and Cougar Athletics.