November is crunch time for family-owned businesses looking to lock in savings before year-end. With updated IRS limits for 2025 and depreciation rules continuing to phase down, this month is your opportunity to make smart financial moves that cut taxes, preserve cash flow, and set your company up for a clean start in January. These steps will help you finish the year strong and step into 2026 with confidence.

Maximize Retirement and Benefit Contributions

Retirement plans remain one of the best year-end tax tools for family businesses. For 2025, employees can defer up to $23,500 into 401(k), 403(b), or 457(b) plans, with an additional $7,500 catch-up contribution available for those age 50 or older. The overall defined-contribution limit including employer contributions is $70,000.

If you have highly compensated employees, note that beginning in 2026, those earning more than $145,000 must make catch-up contributions as Roth (after-tax) under SECURE 2.0. Updating your payroll and plan documents now ensures you’re ready for that change.

Health Savings Accounts remain a valuable deduction for those with high-deductible plans. For 2025, individuals can contribute $4,300, families $8,550, and those age 55 or older an extra $1,000. Flexible Spending Accounts allow up to $3,300 in pre-tax contributions and plans that allow carryovers may permit up to $660 from 2024 to 2025. Reviewing deferrals and confirming payroll settings this month ensures every dollar is maximized before the year ends.

Take Advantage of Depreciation and Section 179 Expensing

If your business plans to upgrade equipment, software, or improve facilities, the current depreciation rules make 2025 a good year to act. Bonus depreciation rules were expanded under the One, Big, Beautiful Bill Act (OBBBA). For property placed in service after January 19, 2025, businesses can once again deduct 100% of qualifying property costs in the year the asset is placed in service. This reinstated full expensing provision gives companies a renewed opportunity to upgrade equipment, software, and improvements while reducing taxable income in the same year.

Section 179 expensing remains a cornerstone tax strategy for smaller and mid-sized businesses. For 2025, the maximum deduction has increased to $2.5 million, with the phase-out threshold beginning at $4 million. This expansion allows many family-owned and closely held companies to immediately deduct the full cost of major purchases while managing taxable income. The limit for heavy SUVs under Section 179 is now $35,000.

To qualify, purchases must be both acquired and placed in service by December 31, 2025. Work with your CPA to decide how to combine Section 179 and bonus depreciation strategically—this mix can help manage taxable income, preserve the Qualified Business Income (QBI) deduction, and minimize state tax complications.

Review Payroll, Mileage, and Bookkeeping Details

Clean payroll and bookkeeping are essential to avoid costly surprises in January. For 2025, the Social Security wage base is $176,100, meaning OASDI tax applies only up to that limit. For 2026, the Social Security wage base increases to $184,500. Make sure your payroll software automatically stops the 6.2% withholding once an employee hits the cap.

S-corporation owners should review reasonable compensation levels before year-end to ensure wages reflect current profitability and duties. If profits are higher than projected, you might need to adjust withholdings or make an additional estimated payment by January 15 to avoid underpayment penalties.

The IRS standard mileage rate for 2025 is 70 cents per mile, up from 67 cents in 2024. Maintaining a contemporaneous mileage log that includes dates, destinations, and business purposes protects your deduction and makes IRS compliance simple.

November is also the perfect time to tighten your books. Reconcile vendor balances, follow up on unpaid invoices, and remove any personal or non-deductible expenses from business accounts. A written capitalization policy such as expensing any purchase under $2,500 keeps your records consistent. If your company holds inventory, perform a physical count before December to adjust for shrinkage or expired stock and get an accurate profit picture before closing the year.

New Overtime Documentation Rules for 2025

Recent federal updates now require businesses to provide employees with documentation supporting qualified overtime for the 2025 tax year. This ensures employees have the information available to accurately claim the deduction on overtime pay on their personal income tax returns. Employers should review timekeeping systems, maintain clear records of hours worked, and verify that overtime pay aligns with both wage laws and payroll tax reporting. 

Leverage Credits, Bonuses, and Family Employment Rules

Timing is everything when it comes to deductions. Charitable contributions, state and local tax payments, and certain insurance premiums must be paid by December 31 to qualify for 2025 deductions. This applies even to many accrual-basis businesses, so scheduling payments early helps avoid year-end bottlenecks.

If your family business started or expanded a retirement plan recently, look into SECURE 2.0 startup credits, which cover up to 100% of eligible costs (up to $5,000 per year for three years), plus extra credits for auto-enrollment and employer contributions. These can dramatically reduce the after-tax cost of offering employee benefits.

Employee bonuses are deductible in the year they’re paid, while profit-sharing contributions to qualified plans can be made up to your tax-return due date if they’re authorized before year-end. Planning these payments in November gives you time to handle paperwork and manage cash flow before the holidays.

Employing family members can provide legitimate tax and business advantages, but it’s critical to keep documentation clean. Each person should have a written job description, accurate timesheets, and pay that matches market rates. Payroll tax treatment can differ depending on family relationship and business type, so review these details with your CPA to ensure compliance.

Conduct a Year-End Projection and Final Review

A year-end projection is one of the most effective tools to minimize taxes and start 2026 on solid footing. With nearly a full year of data available, your CPA can estimate your taxable income, test how Section 179 and bonus depreciation affect your bottom line, and identify whether you should accelerate expenses or defer income.

Because state tax rules often differ from federal depreciation limits, these projections help ensure consistency and avoid surprises during filing season. Making adjustments in November, not December gives you the flexibility to act while it still counts.

Taking the time to fine-tune your strategy now can lead to significant savings, fewer headaches at tax time, and a smoother start to the new year.

Ready to make the most of 2025? Our team can help you analyze your financials, optimize deductions like Section 199A and Section 179, and design a proactive plan tailored to your family business. Schedule your personalized year-end tax consultation today and ensure your strategy is working as hard as you are.

Source Links 

• IRS News Release: 401(k) Limit Increases to $23,500 for 2025
• IRS: COLA Increases for Dollar Limitations on Benefits and Contributions (Retirement Plans)
• IRS Newsroom: Healthcare FSA Limit 2025 ($3,300)
• IRS Standard Mileage Rate 2025 (70 ¢ per mile)
• SSA: 2025 Social Security Wage Base = $176,100 
• Section179.org: 2025 Deduction and Phase-Out Limits ($1.25 M / $3.13 M)