Hidden Year-End Tax Deductions Most Business Owners Miss
- djfiene
- Nov 10
- 4 min read
As the year winds down, most business owners are focused on finishing projects and getting ready for tax season. But there’s still time to grab some easy, legal tax deductions that can make a real difference when April rolls around.
Here are a few of my favorite year-end tax moves that are simple to use — and often overlooked.
🏡 The Augusta Rule — Rent Your Home to Your Business
This one is simple and surprisingly powerful.The IRS allows you to rent your personal home to your business for up to 14 days each year, and that rental income is completely tax-free.
Your business gets a deduction, and you don’t have to report that income personally.
You can use it for things like:
Team or board meetings
Strategic planning sessions
Client appreciation dinners or events
To do it right, keep a few notes:
The business purpose for the meeting or event
The dates used
A reasonable rental rate (what it would cost to rent a similar space nearby)
It’s a simple move that can easily save hundreds in taxes each year. To find out more, check out this blog post that discusses the Augusta rule a bit more.
👨👩👧 Pay Your Kids — and Teach Them to Save
If your kids help in your business — filing, packaging, organizing, posting on social media, or working at events — you can pay them a reasonable wage for that work. If done right, you can often avoid paying payroll taxes as well.
The business gets a deduction, and your kids likely pay little or no tax on the income. Plus, they can use that earned income to start saving in a Roth IRA, where it can grow tax-free for decades.
Make sure the work is legitimate and age-appropriate, keep time records, and pay them just like you would any employee. It’s one of the best long-term family tax strategies around.
🧾 Prepay Expenses (If You’re Cash-Basis)
If your business uses the cash method of accounting, you can prepay certain expenses now and take the deduction this year — even if the expense covers part of next year.
Common examples:
Rent
Insurance
Office supplies or software subscriptions
As long as it’s for 12 months or less and is an ordinary business expense, you can deduct it now.
This is especially helpful if your income was higher than usual this year — it lets you “smooth” your taxable income between years.
📉 Tax-Loss Harvesting — Review Your Investments
If you have investments in a regular brokerage account, look at your gains and losses before year-end.
You can sell losing investments to offset your capital gains.If your losses are greater than your gains, you can deduct up to $3,000 of the excess against regular income.
It’s an easy way to reduce your tax bill without changing your long-term investment strategy.
Just watch out for the wash sale rule — you can’t buy back the same stock or fund within 30 days, or the IRS won’t count the loss.
🚗 Mileage — A Simple Deduction That Adds Up
If you drive for business, those miles can add up fast.
The IRS rate for 2025 is 70 cents per mile, and that includes fuel, maintenance, and depreciation — so it’s an easy way to track.
To stay compliant, track:
The date of each trip
Where you went
The business purpose, and
Starting and ending mileage
At the end of the year, take a quick photo of your odometer on December 31. That’s your proof for the year.
Mileage apps make this easy, but even a quick note on your phone works fine.
❤️ Charitable Giving — Act Before the Rules Change
If you plan to donate early next year, consider doing it before December 31.
Starting in 2026, a new floor or threshold will apply before charitable deductions start to count — meaning fewer people will get the full benefit.
Here are a few ways to give strategically:
Donate appreciated stock instead of cash to avoid capital gains.
Use a Donor-Advised Fund to group several years’ worth of donations and claim a larger deduction this year.
If you’re already planning to give, doing it now just makes good sense.
✅ Quick Recap
Before year-end, check these easy wins:
Rent your home to your business under the Augusta Rule.
Pay your kids for real work — and set them up with a Roth IRA.
Prepay up to 12 months of business expenses.
Review your investments for tax-loss harvesting.
Track your business mileage carefully.
Make charitable contributions before 2025 ends.
A few small steps now can add up to thousands in savings when tax season comes around.
If you’d like help reviewing your options, I’d be happy to walk through them with you.
✍️ Final Thought
Tax planning doesn’t have to be complicated — it just has to be timely. These are simple moves you can still make before December 31 to keep more of what you earn.
Comments