The Solo Entrepreneur’s Guide to Year-End Tax Planning and Retirement Savings

As a woman, you’re probably being pulled in a thousand different directions. And if you’re a business owner, make that two thousand.

Women-owned businesses make up 42% of all businesses in the U.S., and while I would hope that every one of those women is taking advantage of all of the ways to reduce taxes, fund retirement, and stay ahead of upcoming tax changes…I know that’s probably not the case. And this is through no fault of your own; it’s likely you just don’t know all of the options that are available to you.

Let’s fix that.

Here are some strategic moves that, made before December 31^st, can directly impact your bottom line, giving you more resources to invest in your future.

Maximize Your Business Deductions

Before the clock strikes midnight on December 31, review your business expenses. If you’ve been meaning to upgrade your laptop, restock supplies, or invest in software for next year, doing it now could lower your taxable income for 2025.

• New Section 179 Deduction: For 2025, the limit has been doubled to $2.5 million, with a phase-out starting at $4 million - great news if you purchase equipment or technology.​

• Qualified Business Income (QBI) Deduction: Solo proprietors, S corporations, and partnerships can claim a 20% deduction on qualified business earnings - now made permanent.​​

• Home office use: If you regularly and exclusively use part of your home for business, you can deduct expenses like rent, utilities, and insurance.

Don’t forget these often-overlooked deductions:

• Vehicle mileage or expenses: Choose between the standard mileage deduction or actual expenses like gas and maintenance.

• Professional fees: Legal, accounting, and marketing services - including that new website - are deductible.

• Education and training: Courses, certifications, and conferences that enhance your business skills qualify, too.

Fund Your Retirement Plan - and Lower Your Taxes

One of the best perks of being self-employed is the flexibility to save for retirement while reducing taxable income. However, 83% of business owners know they should be saving more for retirement.

Options to consider:

• Solo 401(k): Contribute as both employer and employee - up to $70,000 for those under 50 in 2025, higher if age 50+.​

• SEP IRA: Easy to set up and flexible; useful if income fluctuates and considered "side hustle" income.​ Contribute up to 25% of your net earnings, up to $70,000 for 2025.

• Traditional or Roth IRA: Even smaller contributions help build long-term savings—and Roth contributions grow tax-free.

Example:

When Mia left her corporate job to run her own design studio, she missed the automatic 401(k) deposits that once quietly built her savings. Her accountant suggested opening a Solo 401(k) so she could contribute both as the employer and employee - and get a healthy tax break each year.

In her first year, she contributed $10,000, which immediately lowered her taxable income by the same amount. That alone saved her roughly $2,200 in federal taxes. The following year, as her business grew, she contributed $18,000, trimming her tax bill by nearly $4,000. By the fifth year, she was consistently setting aside $25,000 per year, saving about $5,000 annually in taxes while her retirement balance grew faster through compounding returns.

After ten years, her steady contributions and roughly 7% average annual growth turned her regular deposits into over $350,000—and she had saved nearly $40,000 in taxes along the way.

Prepare for 2026 Tax Law Changes

The One Big Beautiful Bill Act (OBBBA) passed in 2025, permanently extending many business tax benefits and setting the stage for new phase-outs and expanded eligibility in 2026.​​

• Standard Deduction: Jumps to $15,750 for singles and $31,500 for couples , and $23,625 for Head of Household in 2025..​

• The QBI 20% deduction threshold expands: More business owners qualify, and freelancers/side hustlers get a new $400 minimum deduction for eligible QBI in 2026.​​

• Expanded Section 179 deductions remain in place.​

• SALT deduction cap increased for 2025, but reverting after a few years - track your state and local tax strategy if your income is high.​

A Few More Things to Consider:

Review Your Estimated Taxes: If your income has fluctuated this year, consider adjusting your final quarterly payment before January 15 to avoid underpayment penalties.

Give Strategically Before Year-End: Whether it’s cash, supplies, or pro bono work, charitable contributions can reduce your taxable income and strengthen your brand’s values.

Revisit Your Business Structure: If you’re currently operating as a sole proprietor or single-member LLC, review whether an S Corporation election might make sense for 2026 and beyond. It can reduce self-employment taxes by splitting your income between salary and distributions.

For solo entrepreneurs - especially women balancing clients, family, and cash flow - year-end planning is about more than taxes. It’s about protecting your hard-earned success and creating stability in an unpredictable world.

The best part? You don’t have to do it alone.

As a Denver financial advisor who works with women (and a business owner myself), I know how difficult it can be to balance it all. Let’s create a strategy that aligns your goals, taxes, and peace of mind. CLICK HERE to make an appointment.