When a calendar year is drawing to a close, you must both look backward and ahead for purposes of tax planning. First, you must take all necessary steps prior to the end of the year to ensure that you can minimize your tax burden for the year that is ending. At the same time, you must also plan ahead for the coming year, so you can achieve the most favorable tax situation. A New York tax lawyer at the Thorgood Law Firm can help you with both of these aims. We can explain the new tax laws that can affect your situation and help you work within the existing statutes and regulations.
Strengthening Your Tax Position for 2025
There is still time to take certain steps that can help you plan for filing your tax return in the coming year and improving your own situation. For example, you may still reach a decision about which revenues you may want to recognize in 2025 if your business operates on a cash basis. If you are already having a strong year, you may want to defer revenue recognition until the following year.
The same thing goes for your deductions and credits, whether you are an individual or a business. From a personal standpoint, you may consider maximizing your contributions to your retirement accounts to reduce your own income. From a business perspective, you may consider purchasing capital equipment and putting it into use before the end of the calendar year, so you can take a deduction. You have until December 31 to take steps that can change your tax situation for the current calendar year.
Maximizing Your Deductions in 2026
You can plan in advance for taxes in the coming year, even if you do not yet fully know what your tax situation will be in the future. For example, you may plan your contributions to individual tax-advantaged accounts for the coming year, including your 401(k) and health savings accounts. You can also plan ahead for what you intend to give to charity in the coming year and set the deductions and withholdings that will be taken from your check.
The goal of tax planning is twofold. First, you do not want to leave money on the table by not taking deductions and credits to which you are entitled. Second, you do not want to be taken by surprise by a large tax bill after the conclusion of the following year. At a certain point, it becomes too late to plan for taxes, so you should do it early in the year.
Changes in Federal Tax Laws
The recently passed One Big Beautiful Bill Act has made numerous changes to tax laws, some of which take effect in 2026, and others that only recently became law. It is imperative that you understand how tax laws are changing because it could save you money. For example, there is an increased gift and estate tax threshold that takes effect in 2026.
There have also been significant changes to business tax laws. There is 100% “bonus depreciation” for qualifying purchases of capital equipment placed in service after January 19, 2025. From the individual’s perspective, there are new tax brackets and an increased limit in deductions for state and local taxes that you have paid during the current year.
How the IRS interprets and applies these new tax laws remains to be seen. Any time that there have been large changes to the Internal Revenue Code, it is helpful to consult with a tax lawyer to both learn how the new laws will affect you and how they can work to your advantage.
Changes to IRS Reporting and Compliance Requirements
If you own a business, there are new reporting requirements that you need to be aware of for the coming year. For example, in light of the new “no tax on tips” law, employers must now separately report cash tips and qualified overtime compensation on the redesigned draft Form W‑2. At the same time, some reporting requirements have been eased. The threshold for reporting non-employee compensation or other business payments using Form 1099‑NEC has been raised from $600 to $2000.
If you own a business, you need to make these changes now, so they are in place at the start of the year. There may be additional boxes on a Form W-2 that you must incorporate. The withholdings and quarterly payments that you make to the IRS could also change based on the new tax laws.
How a New York Tax Attorney Can Help You Plan for 2026
Tax laws are already both voluminous and complex. Even if laws have been changed in your favor as a taxpayer, there is still quite a bit for you to plan for and track, and you may not be able to do everything on your own. You should not even try because you could be losing money due to a lack of knowledge of tax law.
A New York tax lawyer could help you come up with an individualized strategy to help both your tax compliance and minimize your own burden because we know tax laws. However, you must begin to pursue this strategy now. Tax planning is exactly that – a plan that you make over time, preferably with the help of an experienced professional.
Contact a New York Tax Lawyer Today
Take the first step towards planning for the new tax year and dealing with the one that is drawing to a close by speaking with a New York tax attorney at Thorgood Law Firm. You can schedule a free initial consultation to begin discussing your own tax situation by sending us a message online or by calling us today at (212) 490-0704. We are located in New York, and we help clients throughout the country with their tax law issues. Contact us today to learn how we can help put you in a stronger position on your individual or business tax returns.
