There’s only a limited number of days left in 2025, but there is still enough time to complete certain tasks that are required or helpful to end the year properly and get good start for 2026. Take the time to review your company’s business plan for 2026. And don’t overlook the following…
Important year-end actions to take now
Hold an annual board meeting
If your business is incorporated, you are required under state law in most cases to hold an annual board meeting. This is so even if you’re the only owner or the business consists solely of family members. You may have to do the same if you’re an LLC and your operating agreement requires it (state law doesn’t impose this obligation). The meeting is an opportunity to keep things legal and make important decisions for the coming year. Here is a partial list of actions to consider in an annual meeting (some are unique for corporations):
- Setting compensation for owner-employees and other top employees
- Arranging for sale-leaseback arrangements
- Giving dividends to shareholders
- Purchasing the assets of another company
- Selling corporate assets or shares
- Taking a loan (e.g., setting up a line of credit)
- Declaring dividends or distributions
Do year-end tax planning
While the new year is almost here, it’s not too late to take last-minute actions to favorably impact your 2025 return and get you ready 2026. Here are some of them (again, some are only for corporation):
- Adopting an accountable plan for employee expenses and reimbursement for officer’s expenses.
- Changing accounting methods.
- Choosing to use special tax rules, such as the de minimis safe harbor for writing off the cost of items instead of capitalizing them. While a resolution isn’t mandatory, using the safe harbor requires that the business have procedures in place for it, so the resolution is a good idea (ask your tax pro if you aren’t sure).
- Making or terminating an S election.
- Instituting employee benefit plans, such as 401(k) plans, health reimbursement arrangements, and/or education or adoption assistance plans.
- Retaining earnings by a C corporations and specifying the reasons for doing so in order to avoid a potential accumulated earnings tax.
Update your employee handbook
If you have an employee handbook (and you should), be sure it reflects the latest policies and procedures as well as federal, state, and local laws for 2026. Some areas to think about:
- AI. Include policies about employees’ use of AI and how you use AI in hiring decisions.
- Conduct in the workplace. Provide details about dress codes (if you have them), reporting sexual harassment and other objectional conduct, and following safety policies.
- Work arrangements. If you permit remote or hybrid work arrangements, spell out details of what employees need to do to set up and work within these arrangements.
- Paid family and medical leave. Give details what employees need to do to take such leave and, where applicable, receive payment.
- Wage and hour matters. Spell out scheduling policies (check if your state mandates predictive scheduling). List any changes in holidays, personal days, etc.
Final
There’s not much time left in the year. Be sure to wind up matters for 2025 and position yourself for 2026. Let’s all look ahead!
For more information about year-end planning for your small business, see this list of blogs.
