TAX-SAVING Q&A: Smart Moves Before Year-End

Time is running out to cut your 2025 tax bill. Below, we answer your top tax questions and share a real case study that resulted in $68,000 in savings using proven real estate strategies.

Q1: What are the most overlooked tax deductions for small business owners?

You may be missing out on thousands in deductions. Here are a few commonly overlooked opportunities:
​Home office deduction – Use the simplified method ($5 per square foot) or deduct a portion of actual expenses
​Vehicle expenses – Track mileage or deduct gas, repairs, and lease payments
​Retirement contributions – Set up a SEP IRA and contribute up to $70,000 in 2025
​Software and tools – Deduct subscriptions for CRM platforms, project management software, and even AI tools

Tax Tip: You can deduct 50 percent of business meals if you keep receipts and note the attendees

Q2: How can real estate investors use depreciation to reduce taxes?

Real estate offers powerful tools to lower your tax bill if you use them strategically:
​Bonus depreciation – Write off qualifying improvements in the year you purchase them
​Cost segregation – Break down property components (like lighting and flooring) to accelerate depreciation
​Section 179 – Deduct the full cost of business-use equipment like appliances or roofing

Case Study: $68,000 Saved Using Cost Segregation and Bonus Depreciation​
​Property: $1.2 million multifamily property purchased in 2025
​Strategy: $400,000 in qualifying improvements identified
​Result:

• $400,000 deducted using 100 percent bonus depreciation
• $18,000 additional depreciation
• $68,000 tax savings based on a 17 percent effective tax rate

Q3: Should I prepay expenses or defer income?

It depends on how your income will compare in 2025 and 2026:
​Prepay expenses like rent, insurance, or repairs to increase 2025 deductions
​Defer income by moving invoices or bonuses to January if your 2026 income will be lower
​Avoid AMT traps since certain deductions may not apply under the Alternative Minimum Tax

Q4: How can I avoid IRS underpayment penalties?

If you will owe more than $1,000 in taxes, the IRS expects you to pay throughout the year:
​Safe harbor rule: Pay 100 percent of last year’s tax or 110 percent if your income was over $150,000
​Quick fix: Increase W-2 withholding now to cover your business or rental income

Act Now Before December 31

Many of these deductions and tax-saving opportunities expire at year-end. Acting now could save you thousands.

Need help? We partner with CPAs who specialize in real estate and small business tax planning.
Reply to this email to schedule your free introductory call before December 31.

RSK Tax & Consulting, LLC​
Helping business owners and real estate investors keep more of what they earn.

​