Scott Graham on Unsplash
Scott Graham on Unsplash

Tom Wheelwright is one of the leading authorities in tax matters and wealth generation. A CPA and the author of "Tax-Free Wealth", he is also the CEO of WealthAbility. This is a revolutionary platform by which Tom provides a range of educational tools. WealthAbility has empowered over 244,123 entrepreneurs and investors worldwide to reduce their taxes and generate wealth.

Tom Wheelwright's proven system allows his clients to build wealth via practical strategies that reduce taxes permanently. This strategic tax planning approach is a potent and effective tool for entrepreneurs and investors, especially those looking to gain a competitive business edge in 2025.

Here are Tom's four tips for saving money and boosting your business in the coming year:

1. Determine your liabilities

If you haven't sat down with your tax advisor yet, do it now. You need to know your taxable income and tax liability for the present year and the next as soon as possible, and your tax advisor is the most qualified to give you an accurate estimate. With the information you gain from your consultation, you have a more solid foundation for planning your tax strategy.

Many people neglect this step until the last minute, so they're always surprised when the tax bill arrives in April. This shouldn't be the case as it indicates that you haven't taken a proactive approach to determining your tax obligations. If you want to give your business a competitive edge, get a clear picture of your liabilities as early as you can.

2. Identify tax reduction opportunities

Knowing your approximate tax liability is only the first step. The next is to formulate an effective strategy for reducing your tax payables next April.

A common mistake many people make is postponing their income statement to the following year to reduce their current tax liability. However, reducing your taxes permanently is a more profitable strategy. Some steps to consider are:

  • Maximizing deductions: You're essentially giving money away if you don't take advantage of all the deductions for which you're eligible. Take stock of all your business and personal expenses, particularly those related to your home office and business expenses you pay for out of your personal account.
  • Donating to charities: Contributing to nonprofit organizations is a great way to get deductions. You can even deduct donations to charities up to a certain percentage of your gross income. Better still, donations don't necessarily have to be in cash. In most cases, you can donate stock, property, or digital currency like Bitcoin. When doing so, you can get a deduction for the currency's fair market value without having to account for the capital gain.
  • Using tax credits: Tax credits essentially reduce your taxes by the equivalent dollar value, making them even better than tax deductions. Although you'll have to plan out your strategy to get more tax reduction opportunities in the future, it's still a worthwhile option.

3. Plan ahead

The aforementioned strategies are essentially quick wins that allow you to take advantage of tax deduction opportunities over the short term. But it's also a good idea to figure out ways to spur your business's growth while reducing your taxes long-term. Here are some steps you can take to do so:

  • Create new business entities: Strategically setting up new business entities can get you hefty tax benefits and increase your earning potential if you're an entrepreneur. The key is to create a new LLC, corporation, or partnership before year-end and select the correct tax structure.
  • Invest strategically: Making new investments allows you to take advantage of tax incentives available to entrepreneurs. These typically come in the form of tax credits or deductions.
  • Take advantage of lower tax brackets: Your adult children can give you significant tax benefits apart from the support they provide to your business. If your children work for you, for example, they won't have to pay taxes on their salaries, which you can claim as deductible expenses.

4. Anticipate tax law changes

Tax regulations are always changing and new laws are being added all the time. For instance, many aspects of the 2017 Tax Cuts & Jobs Act are due to expire by the end of 2025 and the new administration will likely introduce a new set of regulations. This is why it's so important to be aware of upcoming developments in the tax landscape and be prepared to take advantage of them.

That being said, no matter what changes the government implements, there will always be incentives available to anyone who positions themselves to take advantage of them. When planning your tax strategy, always strive to be flexible and act quickly to adjust to new tax policies as they're introduced.

These tips can give you a significant edge over your competition. Use them wisely and you can continue to benefit from them throughout 2025 and beyond.