2025 MID-YEAR PLANNING

Mid-Year Tax Planning

As we move into the second half of 2025, business owners, real estate professionals, and healthcare earners have a unique opportunity to take control of their tax strategy before the year slips away. Whether you’re managing rental properties or running a practice/business, you need a clear strategy in place. If you're earning 1099 income, proactive tax planning is equally essential, mid-year planning can help you minimize surprises and maximize savings.

Here are the top strategies to consider before year-end:

1. Review and Adjust Estimated Tax Payments

If your income has changed significantly this year, now is the time to reassess your federal and state estimated payments. Underpayment penalties can be avoided by adjusting your strategy before Q3.

2. Businesses and Rental Property Owner Tax Strategies to Leverage Now

Cost Segregation Studies
Acquired or renovated property in 2025? A cost seg study can accelerate depreciation deductions, especially while bonus depreciation is still available (but phasing out).

Real Estate Professional Status (REPS)
If you aim to qualify for REPS, track your time and participation closely. Now is your checkpoint to ensure you’ll meet the 750-hour test or spend more time on real estate than other activities.

Short-Term Rental Strategies
Short-term rentals (STRs) offer unique opportunities: you might not need REPS to deduct losses if you materially participate. Review booking patterns, average stay durations, and your involvement in daily operations.

Depreciation Planning
Missed depreciation? Planning a partial asset disposition (PAD)? Mid-year is your chance to address errors or catch up through Form 3115 or improved tracking for new assets.

Passive vs. Non-Passive Losses
If you’re close to qualifying for REPS or STR loss treatment, mid-year adjustments could allow you to unlock suspended passive losses or shift to a more favorable tax treatment.

1031 Exchange Planning
Planning to sell a property this year? Now is the time to model potential gain, identify replacement properties, and ensure you’re set up to meet the tight deadlines that come with a 1031 exchange. In order to defer those capital gains on business property.

Tax-Advantaged Rental Property Acquisition
High-income earners can purchase rental properties and use strategies like accelerated depreciation, cost segregation studies, and bonus depreciation to significantly reduce taxable income—especially when combined with real estate professional status or short-term rental tax treatment. We understand these complex rules inside and out to help you maximize your tax benefits and stay fully compliant.

S-Corp Analysis and Structuring
For business income, we perform detailed S-Corp analysis to identify optimal tax strategies, including reasonable salary versus distributions, retirement plan contributions, and minimizing self-employment taxes (FICA). Our expertise ensures you structure your business for maximum tax efficiency and compliance.

3. Retirement & HSA Contributions

Healthcare professionals and independent contractors should review their contributions:

• Max out Solo 401(k), SEP IRA, or SIMPLE IRA plans if eligible

• Consider increasing HSA contributions to lower taxable income and plan for future medical costs

4. Plan for Life & Business Changes

Any big moves coming up?

• Buying or selling a property

• Changing jobs or practices

• Expecting a child or going through divorce

• Refinancing

• Entity restructuring

These events have ripple effects on your tax outcome. Planning now beats scrambling later.

Takeaway: Plan Now, Save Later

If you wait until December, most planning doors are already closed. Mid-year gives you the breathing room to:

• Run projections

• Adjust your strategies

• Make intentional choices

Ready for a Mid-Year Check-In?

Let’s talk strategy, review your numbers, and set a smarter course for the rest of 2025.

→ REACHOUT FOR FREE 15 MINUTE CONSULTATION

This is the ideal time to move from reactive to proactive. Don’t just file your taxes — design them.