November and December Are Tax Planning Months: Key 2025 Strategies for California Taxpayers
November 11th, 2025
Tax Planning Window: November 10 – December 18, 2025
“If you fail to plan, you plan to fail.”
As the holidays approach and the year winds down, November and December are prime months to take charge of your 2025 tax strategy. At TaxPlus, we’re helping California residents and business owners prepare early—especially with major updates from the new One Big Beautiful Bill Act (OBBBA) and the temporary increase in the State and Local Tax (SALT) cap.
Whether you’re in Los Angeles or San Diego, now is the time to schedule a tax planning conference and take advantage of strategies that could reduce your taxable income before December 31.
What’s New: SALT Deduction Increased to $40,000 for 2025
One of the most impactful changes under the new tax law is the temporary increase of the SALT deduction cap from $10,000 to $40,000 for the 2025 tax year. This higher limit benefits taxpayers in high-tax states like California, New York, and New Jersey.
Here’s how it works:
| Filing Status | MAGI (Modified Adjusted Gross Income) | 2025 SALT Cap | Notes |
|---|---|---|---|
| Single or Married Filing Jointly | $500,000 or less | $40,000 | Full deduction |
| Single or Married Filing Jointly | $500,001 – $600,000 | $40,000 minus 30% of income over $500K | Partial deduction |
| Single or Married Filing Jointly | $600,000+ | $10,000 | Cap reduced |
| Married Filing Separately | $250,000 or less | $20,000 | Full deduction |
| Married Filing Separately | $250,001+ | $20,000 minus 30% of income over $250K | Partial deduction |
If your income exceeds the full phase-out level ($600K joint, $300K separate), your SALT deduction remains capped at $10,000.
This change means more taxpayers will be able to itemize deductions and benefit from keeping track of expenses like property taxes, charitable donations, and mortgage interest.
S-Corp Tax Strategy: Lower Your MAGI and Maximize SALT Benefits
For high-income earners whose income may limit the new SALT deduction, forming an S-Corporation (S-Corp) or side business can be a smart way to reduce taxable income.
Running a business—even part-time—may allow you to:
- Deduct qualified business expenses
- Offset W-2 income with legitimate business deductions
- Reduce your Modified Adjusted Gross Income (MAGI)
- Increase your eligibility for the higher SALT deduction
Forming an S-Corp can also protect personal assets from liability and reduce self-employment taxes once your business becomes profitable.
️ Deadline Alert: Set up your S-Corp by November 30, 2025 to ensure approval before year-end!
Higher 2025 Standard Deductions
Even if you don’t itemize, you’ll still benefit from the higher standard deductions in 2025:
- Married filing jointly: $31,500 (up $2,300 from 2024)
- Single or Married filing separately: $15,750 (up $1,150)
- Head of household: $23,625 (up $1,725)
- Additional deduction: $2,000 for those age 65 or older or blind
Additionally, under OBBBA, qualifying seniors can claim a temporary “Senior Bonus” deduction of up to $6,000 per person ($12,000 for married couples filing jointly) between 2025 and 2028. This deduction reduces taxable income whether you itemize or take the standard deduction.
Key Tax Law Updates Under OBBBA for 2025
Several provisions of the One Big Beautiful Bill Act (OBBBA) will take effect in 2025. Here are the highlights that may impact your tax planning:
- Bonus Depreciation Restored: 100% deduction for qualified business assets placed in service after January 19, 2025.
- Child Tax Credit Increase: From $2,000 to $2,200 per child.
- Electric Vehicle Credit: Repealed as of September 30, 2025 (used EV credit remains until June 2026).
- Residential Energy Credits: Ends December 31, 2025.
- New Deductions for Qualified Tips and Overtime: Up to $25,000 in qualified tips and $12,500 ($25,000 joint) in overtime deductions, subject to income limits.
These provisions create significant opportunities for tax savings—especially for California business owners, freelancers, and real estate investors.
2025 Year-End Tax Moves for Business Owners
Business owners can take advantage of several year-end deductions before December 31, 2025:
✅ Prepay Qualifying Expenses: Deduct up to 12 months of business rent, insurance, or equipment lease payments in advance (cash-basis taxpayers only).
✅ Defer Income: Delay billing until January 1, 2026, to shift income into the next tax year.
✅ Purchase Equipment: Take advantage of 100% bonus depreciation for new or used business assets.
✅ Improve Commercial Property: Deduct interior improvements (Qualified Improvement Property) placed in service by year-end.
Why Act Now?
Tax planning isn’t just about compliance—it’s about strategy. With major tax law shifts in play and a limited planning window between November 10 and December 18, 2025, now is the time to review your financial position, assess potential deductions, and make proactive adjustments.
Schedule Your Tax Planning Conference
Our Los Angeles and San Diego tax professionals are ready to help you navigate these new opportunities and minimize your 2025 tax liability.
Los Angeles Office
Email: JTH@taxplus.com
Phone: 310.398.3231
San Diego Office
Email: Henna@taxplus.com
Phone: 858.279.1640
We’re available in-person, by phone, or by video conference—whatever fits your schedule best.
About TaxPlus
TaxPlus provides personalized tax preparation, tax resolution, and accounting services for individuals and small businesses across Los Angeles and San Diego. Our team of Enrolled Agents and tax professionals has been helping Californians make smart tax decisions for over two decades.
Book your 2025 Tax Planning Appointment today.
