With tax deadlines fast approaching, small business owners still have time to leverage last-minute tax breaks to lower their 2024 federal income tax bill. Whether you’re a sole proprietor, LLC, partnership, S corporation, or C corporation, strategic tax planning can make a big difference.
Key Tax Filing Deadlines for 2024
March 17, 2025: Partnerships, LLCs taxed as partnerships, and S corporations.
April 15, 2025: C corporations and sole proprietorships.
Extensions: A six-month extension is available, but taxes owed must be paid by the original deadline to avoid penalties.
5 Last-Minute Tax Breaks to Consider
1. Qualified Business Income (QBI) Deduction
Owners of sole proprietorships, single-member LLCs, and pass-through entities may qualify for up to a 20% deduction on qualified business income (QBI). However, income limitations apply, so strategic planning—such as adjusting depreciation deductions—can optimize this benefit.
2. Section 179 Depreciation Deductions
Small businesses can immediately deduct up to $1.22 million in qualifying asset purchases for 2024, including:
Equipment, software, and vehicles.
Qualified improvement property (QIP) for commercial buildings. However, deductions phase out after $3.05 million in total qualifying purchases.
3. First-Year Bonus Depreciation
For assets not fully deductible under Section 179, a 60% first-year bonus depreciation deduction is available in 2024. This applies to the same asset categories as Section 179 but without the business income limitation.
4. Retirement Plan Contributions
Establishing or funding a tax-favored retirement plan can result in substantial deductions. For example:
SEP IRAs allow up to $69,000 in contributions.
401(k) plans and defined benefit plans may offer even larger deductions.
Plans can be set up and funded by the tax filing deadline, including extensions.
5. Business Casualty Loss Deductions
If your business suffered a federally declared disaster loss in 2025, you may elect to deduct it on your 2024 return, potentially securing tax relief sooner.
Take Action Now
These last-minute tax strategies can help optimize your tax bill before the deadline. For personalized guidance, contact Verity CPAs at info@verity.cpa or call 808.546.5026.
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