Q4 isn’t just year-end — it’s strategy season.
It’s your last chance to reduce your tax bill, fund future wealth, and stack pre-tax moves that put you in control of where your money goes.
At Washington & Co. Inc — Strategic Tax & Advisory, we help high-income entrepreneurs lock in tax-smart plays before December 31 hits. And in 2025, with bonus depreciation phasing out and IRS enforcement ramping up, proactive planning matters more than ever.
This guide walks through the exact retirement, reinvestment, and pre-tax strategies we’re using to help our clients keep more of what they earn — and build faster wealth.
Step 1: Retirement Contributions — Stack Every Layer
Maxing out retirement plans is one of the fastest ways to reduce taxable income while building long-term wealth. Here are your 2025 limits:
- Solo 401(k): $69,000 ($76,500 with catch-up)
- SEP IRA: Up to 25% of comp, max $69,000
- Cash Balance Plan: Up to $300,000+ depending on age and income
- Traditional IRA: $7,000 + $1,000 catch-up
- HSA (if eligible): $4,150 individual / $8,300 family
We help clients layer these like this:
- Max employee + employer contributions into Solo 401(k)
- Add Cash Balance Plan if income is $300K+
- Fund Roth IRA through a backdoor or spouse contribution
- Use HSA for a “stealth retirement account” with triple tax advantages
If you wait until January, you miss the deduction — and the compounding.
Step 2: Reinvest Strategically Inside Your Business
Q4 is the ideal time to pull forward high-ROI investments that qualify as business expenses:
- Equipment
- Technology upgrades
- Strategic contractors
- Software purchases
- Continuing education
- Team bonuses or retreats
Bonus depreciation is still 60% in 2025 — but only if assets are placed in service by December 31.
We help clients analyze what can be accelerated into Q4 without hurting cash flow — and make sure it’s backed by documentation.
Step 3: Optimize W-2 Compensation for S Corps
For S Corp owners, your W-2 salary directly affects:
- 199A deduction eligibility
- Retirement contribution limits
- Payroll tax exposure
- Audit risk under the BBB
Q4 is your last chance to adjust W-2 wages to balance savings and compliance.
We recommend:
- Benchmarking “reasonable compensation” with third-party tools
- Adjusting final payroll runs to optimize deduction mix
- Timing bonus or profit-sharing payments before year-end
- Reviewing fringe benefits to ensure they’re deductible and compliant
This single move often saves $10K–$30K in taxes — legally.
Step 4: Run a Q4 Tax Credit Audit
The clock’s ticking on key credits that must be captured before the year closes:
- R&D Credit: For software, systems, or internal innovation
- Work Opportunity Credit (WOTC): For hiring from qualifying categories
- Energy Efficiency Credits: For commercial real estate upgrades
- Employee Retention Credit (ERC): If you’re still eligible via amended returns
We help clients document, calculate, and file these before time runs out.
Step 5: Time Income and Expenses Intelligently
For cash-basis businesses, you may be able to:
- Delay large invoices until January
- Prepay expenses (up to 12 months) for rent, insurance, etc.
- Trigger last-minute expenses that create immediate deductions
For accrual-based companies:
- Review billing cycles and service delivery
- Plan profit-sharing or bonuses
- Time client retainers to match income needs
Too many founders wait until December 29 — by then, options are gone.
Real Example: $128K Saved with Layered Strategy
One of our clients — a digital agency generating $1.4M in profit — came to us in early Q4 with no plan.
Here’s what we implemented by November:
- Maxed out $69K Solo 401(k)
- Added $185K Cash Balance Plan
- Adjusted W-2 comp to secure 199A deduction
- Bought and placed in service $120K in tech equipment
- Secured $8,400 R&D credit
Total tax savings: $128,300 — before year-end.
Q4 Action Plan
- Max out all retirement contributions before December 31
- Audit your current comp and fringe benefits
- Stack business expenses and prepay when it makes sense
- Review potential tax credits and eligibility
- Run year-end projections to test multiple scenarios
- Book time with your advisor to implement
Book Your Q4 Strategy Session
Q4 isn’t for guessing — it’s for winning.
We’ll model your options, help you implement fast, and make sure your 2025 return is strategic, compliant, and cash-optimized.
Schedule your Q4 Tax Strategy Session with Washington & Co. Inc — Strategic Tax & Advisory.