2025 Year-End Tax and Financial Checklist for Veterinary Hospitals

The end of the year can quickly become a hectic time for veterinary hospital owners and management teams. Between managing patients, supporting staff, and spending time with family and friends, it’s easy for important tasks to slip through the cracks.  That’s why now is the perfect time to pause, review, and plan ahead. Whether your goal is to strengthen cash flow, prepare for tax season, or position your hospital for growth in 2026, the checklist items below can help set you and your hospital up for success in the new year.

Veterinary Hospital Tax Planning Considerations

• If your practice is in need of equipment, purchase and place it in service by Dec. 31 in order to write off a portion or all of the cost in 2025. The One Big Beautiful Bill (OBBB) legislation reinstated 100% bonus depreciation and expanded the Section 179 depreciation deductions. Please contact your KSM advisor if you have any questions on whether the equipment or asset you are purchasing will qualify for accelerated depreciation deductions.
• Complete an annual review of your current fixed asset listing and remove any equipment that is not being used. This is especially important if you reside in a state where equipment is subject to personal property taxes.
• Complete a year-end physical inventory count.
• Review aged receivables/payables and determine if any should be written off.
• Review your reminder system and reach out to any clients who are missing appointments in order to get them in as soon as possible before the end of 2025.
  • Consider implementing a payment plan or wellness plan for 2026, which can help improve patient compliance.
• Provide the following to your payroll provider (if applicable) for inclusion on W-2 forms:
  • Personal use of company-owned vehicles
  • Shareholder health insurance premiums paid on behalf of greater-than-two-percent owners of an S corporation
  • Disability insurance premiums paid on behalf of owners
• Set aside money in an account to plan for your tax bill. Even with slower growth, being prepared now will help you budget as you look ahead to 2026.
• Reach out to your CPA regarding the pass-through entity tax election if you are not already taking advantage of this. Please note that pass-through entity tax regulations differ in each state. Please contact your tax advisor with any questions.

Retirement Tax Planning Considerations

• Maximize your traditional and/or Roth IRA contributions. Note: There are income limitations related to Roth IRA contributions. Please contact your tax advisor with any questions.
  • The 2025 maximum for those under the age of 50 is $7,000.
  • The 2025 maximum for those over the age of 50 is $8,000.

Maximize employee and/or spouse retirement plan deferrals:

*Note: These new “super catch-up” contribution options require adoption by your retirement plan.

Maximize Health Savings Account (HSA) deferrals:

Individual Tax Planning Considerations

• Make contributions to your 529 college savings plan by Dec. 31, 2025.
• Consider making any charitable contributions by Dec. 31. Consider gifting appreciated securities (held long-term) versus cash. The donation you make and the deduction you get are greater than they would be if you were to sell shares and donate the after-tax cash amount.
• Submit for reimbursement all business expenses that were paid personally. These are no longer deductible on your personal return.
• Discuss your projected tax liability with your CPA to understand the amount of tax that may be due in April.

As trusted advisors to veterinary hospitals nationwide, KSM’s Veterinary Services Group provides accounting, tax, and strategic guidance to improve financial performance and long-term profitability. Our veterinary CPAs partner with you to identify opportunities, mitigate tax burdens, and position your practice for continued success. Contact us to learn more about how to maximize your hospital’s planning opportunities.