Business Deductions to Claim Before End of 2024
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It may be incredible to realize, but we have officially entered the last couple months of 2024. As 2025 quickly approaches in less than two months, it’s time to start thinking about your 2024 tax return due early next year. Specifically, you need to think of which deductions you are claiming on your tax return to lower your taxable income, and ultimately, your tax burden. But if this is the first time you’ve thought about your taxes all year, you will have lost a lot of proactive tax planning opportunities. Luckily, there are still some last-minute tax deductions you could claim.
A tried and true method to instantly reduce your 2024 taxable income is to delay collecting from your customers. For example, in December, instead of billing your clients on a weekly basis, wait until after the new year to send bills. This way, the income you collect won’t be reported as 2024 income; it will be delayed till your 2025 tax return. If you’ve had a great year but are worried about paying significantly more taxes from it, this is a great strategy.
Another reliable method to reduce income is to take advantage of IRS safe harbor rules. This strategy allows you to prepay business expenses before the turn of the new year. In turn, you can deduct these expenses on your 2024 tax return. A common way to use this strategy is by prepaying your business’s rent for 2025 in December. Just remember that you need to document any payments you wish to claim under safe harbor rules so the IRS does not disallow them.
If you buy a lot of business equipment, such as machinery, computers, furniture, and certain qualifying vehicles, the Section 179 and bonus depreciation deductions could be beneficial for you. However, you must remember that land cannot be depreciated.
These strategies are not the only last-minute deductions you could claim, but keep in mind that time is running out. If you have not met with your tax professional to discuss your 2024 tax strategy, now is the time to do so. You don’t want to wait and find out you’ve missed the opportunity to reduce your tax burden. To meet with a tax professional before the end of 2024, reach out to XQ CPA. Give us a call or make an appointment online at the link below. We are here to help you.
Phone: 832-295-3353
Online Booking: https://xqcpa-bookme.acuityscheduling.com/schedule.php
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Want to pay less taxes? Read XQ CPA's official tax planning guidebook! How to Grow Your Wealth Through Tax Planning.
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