As the end of the year approaches, now is the time for business owners to review their tax strategies and identify opportunities to minimize their tax liability. Taking a proactive approach before December 31 can help you make informed decisions and prepare for the year ahead. The following three tax planning strategies may make a difference for your business this tax year.
1. Corporate charitable deductions
Beginning in 2026, C corporations can generally deduct charitable contributions only to the extent they exceed 1% of taxable income, subject to a 10% limit. Limited carryforward rules apply. Certain contributions may alternatively qualify as business expenses when IRS requirements are met.
Year-end consideration: Review the timing and structure of charitable contributions to maximize available deductions.
2. Qualified Small Business Stock (QSBS)
The One Big Beautiful Bill Act expanded QSBS tax benefits for qualifying stock acquired after July 4, 2025, including gain exclusions of:
- 50% after three years,
- 75% after four years, and
- 100% after five years.
The law also increased the per-issuer dollar exclusion limit to $15 million and the gross asset eligibility threshold to $75 million, subject to applicable limitations.
Year-end consideration: Evaluate QSBS eligibility when planning investments, ownership transitions, or future business sales.
3. Research and Experimentation (R&E) tax benefits
Beginning in 2025, businesses can generally immediately deduct qualifying domestic research and experimental costs under Section 174A, while foreign research costs remain subject to 15-year amortization. Qualifying activities may also be eligible for the separate Section 41 R&D tax credit, subject to specific requirements.
Year-end consideration: Review research activities, expense classifications, and documentation to identify available deductions and credits.
Plan ahead with SEK
Year-end tax planning is an opportunity to evaluate your business’s financial position, take advantage of available tax benefits, and prepare for the coming year. However, the right strategies depend on your business’s unique circumstances, goals, and tax obligations. In you have questions, contact SEK’s Business Tax & Advisory team to discuss your year-end tax planning opportunities and develop strategies that support your long-term financial goals.
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