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Year-End Tax Planning Tips Every Rochester Small Business Should Know

Published November 1st, 2025 by Nacca And Capizzi

As the calendar year comes to a close, many Rochester small business owners shift their focus to wrapping up projects, hitting revenue goals, and preparing for the holidays. But there’s another crucial task that can’t be overlooked: year-end tax planning. Proactive planning before December 31 can help you reduce your tax burden, improve cash flow, and set your business up for success in the new year.

At Nacca & Capizzi, LLP, we’ve been helping Rochester businesses navigate tax season since 1979. Here are several key year-end tax planning tips every small business owner should know.

1. Review Your Financial Statements

The first step in year-end tax planning is reviewing your income statement, balance sheet, and cash flow reports. Understanding your financial position helps you make informed decisions about deductions, credits, and strategies. If your bookkeeping isn’t up to date, this is the time to catch up—clean books are the foundation of smart tax planning.

2. Maximize Business Deductions

Many small business owners miss out on deductions simply because they don’t track expenses carefully. Before the year ends, review all receipts, invoices, and mileage logs to ensure you capture every eligible expense. Common deductions include:

Office supplies and equipment
Business travel and mileage
Professional fees (including accounting and legal services)
Marketing and advertising expenses
Home office expenses (if applicable)

Investing in necessary purchases before year-end can also increase deductions for the current tax year.

3. Consider Section 179 and Bonus Depreciation

If you’ve purchased new equipment, vehicles, or technology for your Rochester business in 2025, you may be able to take advantage of Section 179 expensing or bonus depreciation. These provisions allow businesses to deduct the full purchase price of qualifying assets instead of depreciating them over several years. This can significantly lower your taxable income for the year.

4. Manage Your Income and Expenses

Year-end is the perfect time to strategically manage when income is received and expenses are paid. For example:

If you expect to be in a lower tax bracket next year, you may want to defer income into January.
If you anticipate higher profits next year, accelerating income into the current year might be advantageous.
Prepaying expenses (like rent, insurance, or vendor contracts) can increase deductions for the current year.

Every situation is unique, which is why working with a tax advisor is so important.

5. Review Retirement Contributions

Contributions to retirement plans not only prepare you and your employees for the future, but also provide immediate tax benefits. Consider maximizing contributions to SEP IRAs, SIMPLE IRAs, or 401(k) plans before the year ends. These contributions reduce taxable income while strengthening retirement security.

6. Evaluate Your Payroll and Bonuses

Year-end is a common time for businesses to issue employee bonuses. Structuring these payments strategically can benefit both the business and employees. Additionally, make sure payroll tax deposits are current to avoid penalties. Reviewing payroll with your accountant ensures compliance and may highlight opportunities for savings.

7. Take Advantage of Tax Credits

In addition to deductions, tax credits can significantly reduce your liability. Popular credits for small businesses include:

R&D Tax Credit for businesses investing in innovation
Work Opportunity Tax Credit for hiring employees from targeted groups
Energy Efficiency Credits for certain property improvements

Many Rochester businesses overlook these opportunities simply because they’re not aware of them.

8. Plan for Estimated Taxes

If you make quarterly estimated tax payments, review your current payments to ensure you’re on track. Underpaying can result in penalties, while overpaying ties up cash unnecessarily. Adjusting before year-end keeps your tax liability balanced and predictable.

9. Prepare for Changes in 2026

Tax laws can change from year to year. Staying informed about new legislation ensures that your planning strategies remain effective. For example, shifts in deductions, credits, or retirement contribution limits may impact your approach for the upcoming year. Partnering with a local CPA firm like Nacca & Capizzi ensures you never miss an update that could affect your bottom line.

10. Schedule a Year-End Tax Review

The best way to minimize stress and maximize savings is to schedule a year-end consultation with a trusted tax advisor. At Nacca & Capizzi, we sit down with Rochester business owners to review their financials, project tax liabilities, and implement strategies before it’s too late. This proactive approach helps clients feel confident heading into the new year.

Why Rochester Businesses Trust Nacca & Capizzi

Since 1979, Nacca & Capizzi has been a trusted partner for small businesses across Rochester and Western New York. Our experience spans industries including construction, retail, medical practices, professional services, and non-profits. As QuickBooks ProAdvisors and tax specialists, we combine technology with personalized advice to give our clients the clarity they need to thrive.

Get Ready for Year-End Today

Don’t let tax season catch you off guard. By taking proactive steps now, you can reduce your tax burden, avoid last-minute stress, and start 2026 on solid financial footing. Whether you need help with QuickBooks, payroll, or advanced tax strategies, Nacca & Capizzi is here to guide you.

Contact Nacca & Capizzi today to schedule your year-end tax planning consultation.