Prepay Expenses (IRS 12-Month Safe Harbor)

Cash-basis businesses can prepay up to 12 months of expenses—such as rent, insurance, or equipment leases—and deduct them this year.

Example: Prepaying $36,000 of 2026 rent on December 31 gives you the full deduction in 2025.If mailing a check, send it on December 31 and keep tracking or postal receipts.

Delay Year-End Billing

On the cash basis, income isn’t taxed until received.Pushing December invoices into January shifts income into 2026.

Buy Equipment You Already Planned to Purchase

Machinery, tools, computers, and vehicles purchased and placed in service by December 31 may qualify for 100% bonus depreciation or Section 179 expensing.

Use Business Credit Cards Strategically

For sole proprietors, deductions occur when the charge is made, not when the card is paid.December charges reduce 2025 income, even if paid in January.Corporations benefit when employees use company cards as well.

Claim Every Valid Deduction

If an expense is legitimate and documented, claim it.And if deductions exceed income, a Net Operating Loss (NOL) can carry forward to offset future profits.

Review Qualified Improvement Property (QIP)

Interior improvements to your office, warehouse, or shop may qualify for immediate expensing instead of 39-year depreciation, if placed in service by year-end.