Final Quarter Tax Strategies for 2025: Spotlight on Small Business Owners

Welcome to the Worth Tax Brief — where taxes don’t have to feel scary, boring, or overwhelming. My goal is to make them clear, practical, and even a little interesting. Whether you’re a small business owner, a real estate investor, or simply trying to make sense of your tax bill, you’re in the right place.

On the horizon is one of the biggest tax changes yet: the “Big, Beautiful Bill” (BBB) — a massive piece of legislation that could reshape how we file, plan, and pay. These laws often run hundreds of pages, filled with dense legal language. My job? To cut through the noise and find strategies that keep more money in your pocket.

Here’s what you can expect from this blog:

Clear, straightforward breakdowns of new tax rules (like the BBB).

Actionable strategies you can start using right away.

No fluff, no jargon — just practical insights that translate IRS-speak into real-world solutions.

Final Quarter Tax Strategies for 2025: Spotlight on Small Business Owners

1. Should you elect S corporation (S-Corp) status?

Switching from a single-member LLC (SMLLC) to an S-Corp can bring significant tax advantages — especially when it comes to payroll taxes.

· SMLLC (default taxation): All net income is subject to self-employment (SE) tax — 15.3% for Social Security and Medicare.

· S-Corp election: You pay yourself a “reasonable salary” (subject to payroll tax), while the remaining profit flows through as distributions, which are not subject to SE tax. This shift can save thousands.

Example:

· LLC owner earns $200,000.

- As an LLC: All $200,000 taxed with SE tax.

- As an S-Corp: $100,000 as salary (payroll tax applies) + $100,000 as distributions (no SE tax).

- Estimated savings: ~$15,000.

2. Unlock added benefits with S-Corp status.

With payroll in place, S-corps open the door to stronger retirement and fringe benefit options. For instance, a solo 401(k) lets you maximize retirement contributions with both employee deferrals and employer matches.

3. When S-Corp status may not be the best fit.

If the LLC only generates a small profit (generally under ~$30K per year), the tax savings from avoiding self-employment tax often don’t outweigh the extra payroll, bookkeeping, and filing costs of maintaining S-Corp status.

Stay tuned for more insights in the Worth Tax Brief. For personalized guidance, call Worth Tax Advisors. 

Disclaimer: This post is for informational purposes only and does not constitute legal or tax advice.