The end of the year is fast approaching, and with it comes the perfect opportunity to set your business up for a thriving 2025. Whether it’s the fall chill in the air or the holiday decorations popping up everywhere, the calendar’s relentless march toward the new year is unmistakable.
Below is a step-by-step guide to making the most of the year-end rush and starting 2025 strong.
Refresh Your Financial Records
Before diving into 2025 planning, take time to clean up your financial records. Accurate, well-organized books are essential for developing a solid budget and preparing for tax season.
- Organize Your Data: Ensure all income, expenses, and transactions are up to date in your accounting software.
- Plan for Tax Savings: Properly categorize records to maximize deductions and provide the basis for a smooth tax filing process.
Optimize Your Year-End Tax Strategy
With your financial records in order, work with a tax professional to develop a year-end strategy. This helps you manage your tax liability and set your business up for financial success. Consider these actions:
- Make quarterly estimated tax payments to avoid penalties.
- Decide whether to send invoices or defer income to next year.
- Prepay certain 2025 expenses or invest in new equipment.
- Plan for staff bonuses or other compensation.
- Forecast cash flow to ensure you can meet tax deadlines.
Pro Tip: Avoid spending money just for tax benefits. The savings usually amount to only a fraction of the expense. Be strategic with your year-end decisions.
Prepare for Tax Season
Even with a trusted CPA on your side, tax season requires active participation from business owners. Get ahead of January’s demands by addressing the items listed below:
- Employee Records: Verify that employee details like names, addresses, and benefits are accurate.
- 1099 Prep: Collect W-9s from vendors to streamline 1099 submissions.
- Payroll Deadlines: Check cut-off dates for your final 2024 payroll to align income reporting with your tax goals.
Evaluate Your S-Corp Status
If your business operates as an S-corp, you are required to pay yourself a reasonable salary. This involves determining a wage that reflects industry norms and aligns with your company’s financials.
S-corp status can offer tax advantages, particularly for professional service firms, but it comes with added compliance requirements, like payroll processing and additional tax filings. Assess whether the benefits outweigh the complexities for your specific situation.
Celebrate and Reflect on 2024
Before setting your sights on 2025, take a moment to reflect on your accomplishments this year.
- How did your business grow?
- Who did you help, directly or indirectly?
- Did you provide opportunities for employees or make an impact in your community?
Set Clear Financial Goals for 2025
Once you have reviewed 2024, shift your focus to what you want to achieve in 2025. Start by identifying how you want to serve your clients or customers, then translate these objectives into measurable financial and operational goals.
Whether your priorities include growth, new product launches, or work-life balance, ensure your goals align with your values and business vision.
Build a Budget
A well-crafted budget is essential for turning your goals into reality.
- Break down revenue targets into monthly increments, considering seasonality if applicable.
- Allocate funds for one-time investments like technology upgrades or professional development.
A realistic, actionable budget provides a roadmap for success.
Establish Key Performance Indicators (KPIs)
KPIs help you track progress and ensure your team is aligned with your goals.
- Financial Metrics: Monthly revenue, profit margins, or cash flow.
- Operational Goals: New client acquisition, project completions, or marketing activities.
Stay Compliant with New Laws
The new year often brings regulatory changes. Research any laws taking effect in 2025 that may impact your business, such as:
- Adjustments to minimum wage or PTO requirements.
- Updates to labor or advertising laws.
- Filing requirements under the Corporate Transparency Act.
Being proactive about compliance helps avoid costly penalties.
File Beneficial Ownership Information (BOI) Reports
Don’t forget the January 1, 2025, deadline for filing BOI reports under the Corporate Transparency Act. These reports require businesses to disclose details about their owners, officers, and other key individuals to FinCEN.
Make 2025 Your Best Year Yet
By focusing on the fundamentals – financial preparation, compliance, and strategic goal-setting – you are setting the stage for a successful year. With thoughtful planning and a clear vision, 2025 can be your most productive and rewarding year yet!
About Us
Oberman Law Firm represents clients in a wide range of practice areas, including private equity, M&A, healthcare, corporate transactions, intellectual property, data privacy and security, regulatory compliance and governance, cross-border transactions, labor and employment, construction law, litigation, private clients’ services, corporate restructuring, and white-collar and governmental disputes.
As a firm, we offer the highest quality legal advice coupled with extraordinary and tailored service to deliver exceptional results to our clients. Our philosophy is to invest deeply in the brightest legal talent and build dynamic teams that operate at the pinnacle of respective practice areas. We believe in empowering our attorneys, encouraging entrepreneurialism, operating ethically and with integrity, and collaborating to bring the very best to every client engagement. These principles have guided us in building extraordinary and successful long-term partnerships with our clients.
