This guide covers selected federal planning topics for the 2025 tax year. It is an educational checklist for reviewing records and filing positions, rather than an account of a client interview. Apply the rules for the tax year involved; a 2025 rule or limit should not automatically be used for another year.
1. Review qualified business income eligibility
Eligible noncorporate taxpayers may qualify for the qualified business income (QBI) deduction. Eligibility and the calculation depend on the business, taxable income, and applicable limitations. An LLC or S corporation label alone does not establish entitlement. Start with the 2025 IRS Form 8995 instructions and confirm whether the simplified form or Form 8995-A applies.
2. Document asset purchases and depreciation
For certain qualified property acquired and placed in service after January 19, 2025, the law reinstated a 100% special depreciation allowance. Other acquisition dates, business-use requirements, elections, and asset limitations may change the treatment. Retain invoices, acquisition dates, in-service dates, and business-use records. See IRS Publication 946.
3. Evaluate entity and compensation decisions
Review an entity change before making an election. Consider eligibility, filing deadlines, payroll obligations, reasonable compensation, administrative costs, and state tax treatment. An S corporation election does not automatically produce savings. Our business consulting and business tax preparation services can help review the agreed scope.
4. Keep books and payments current
Reconcile accounts, document expenses, and review estimated payments for the applicable tax year. Bookkeeping support can improve the records available for preparation. Complete records, timely authorization, filing, and payment remain necessary; planning does not guarantee penalty avoidance.
5. Respond to IRS notices
Read each notice for its specific issue and response deadline. Gather the requested records and discuss representation if needed. IRS representation depends on the engagement and client authorization; no particular examination outcome is guaranteed.
Discuss your records and tax year
Henriquez Accounting & Tax Services provides tax preparation, bookkeeping, advisory support, and IRS representation. Schedule a consultation to review the services appropriate for your circumstances.