Key Takeaways:
- Tax planning is most effective when approached as an ongoing process rather than a year-end task.
- Changes to tax laws happen quickly (and sometimes retroactively), making regular reviews essential.
- Proactive, ongoing tax planning supports better cash flow, more informed decision-making, and alignment with broader financial and business goals.
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For many people, tax planning starts when deadlines loom. However, for businesses and individuals with large assets to protect, waiting until spring is a missed opportunity. The most effective strategies are proactive and sometimes take shape months — even years — in advance.
Year-round tax planning gives you more visibility into your overall tax situation, reduces risk, and helps you make sound financial decisions.
Why Proactive Tax Planning Matters More Than Ever
The tax code is constantly changing. Legislative agendas, economic pressures, and global events create ripple effects that reshape tax rules, rates, and opportunities.
For example, the Tax Cuts and Jobs Act (TCJA) of 2017 introduced 100% bonus depreciation for 2018 through 2022. Since then, this benefit has gradually reduced — to 80% in 2023, 60% in 2024, 40% in 2025, and so on until it’s scheduled to be phased out entirely by the 2027 tax year.
In his March 2025 address to Congress, President Trump indicated he wants to restore 100% expensing and make it retroactive to January 20, 2025.
Of course, presidential speeches aren’t legislation. We don’t yet know whether Congress will reinstate 100% bonus depreciation and, if they do, when it will take effect. Congress could act before year-end or pass a larger tax reform package in early 2026 and apply provisions retroactively.
So, how should small business owners and real estate investors approach tax planning for 2025? Working with tax professionals who monitor developments throughout the year and model different scenarios can better position you to adapt. This isn’t just about being prepared — it’s about making informed decisions while there’s still time to act.
Benefits of Ongoing Tax Planning
Bonus depreciation is just one example of the uncertainties you might face in planning taxes. Several other provisions of the TCJA are set to expire on January 1, 2026, which can impact other tax planning opportunities like accelerating or deferring income, planning for expenses, and investing.
Here’s how year-round tax planning can help:
- Informed decision-making: Strategic planning helps clarify a decision’s real cost (or benefit) before you finalize it. Whether you’re considering a major equipment purchase, expanding to a new location, or adjusting compensation strategies — federal, state, and local taxes can influence the outcome.
- Better cash flow management: Unexpected tax bills can disrupt operations or derail investment plans. Regular forecasting and mid-year check-ins help align tax liabilities with expected revenue — giving you more control over timing and payments.
- Flexibility to implement tax-efficient strategies: Many planning opportunities have calendar year-end deadlines. For example, opportunities to time income or expenses, make charitable contributions, fund certain retirement plans, and harvest tax losses expire on December 31. Addressing these well before the fourth quarter opens more possibilities and gives you more time to act on them.
- Preparing for regulatory scrutiny: Detailed recordkeeping, clean books, and consistent processes reduces the risk of errors and makes it easier to respond to inquiries or audits if they arise.
- Alignment with broader financial goals: Effective tax planning isn’t separate from financial planning; it’s a critical component. Evaluating trust structures, legacy planning, and investment strategies often involves coordinating with legal, finance, and operations teams. Planning throughout the year gives you more time to consider all areas of your business or life that these decisions might change.
Building a Thoughtful Tax Planning Calendar
The tax planning process doesn’t need to be complex or time-consuming. You just need a regular system of checkpoints throughout the year.
For example, your tax planning cadence might look like this:
- Q1: Review prior-year performance and find planning priorities for the year ahead.
- Q2: Reassess projections and make mid-year adjustments to withholding, estimated payments, or entity structure if necessary.
- Q3: Begin year-end planning and scenario modeling, considering any upcoming legislation.
- Q4: Execute your plan before December 31.
This structure allows for more prompt decisions and meaningful conversations, not rushed moves made under deadline pressure.
How MGO Can Help
Ultimately, tax planning is about clarity. It’s about understanding your current situation, preparing for what’s ahead, and making confident decisions rooted in reliable data.
If you’re managing complex finances or large-scale operations, contact MGO today. We’re happy to help you plan throughout the year. It’s not just a best practice — it’s an essential strategy for resilience, adaptability, and long-term success.