How High-Income Earners and Business Owners Can Lower Their 2024 Taxes
Tax season is here, and if you’re a high-income earner or business owner, finding ways to legally lower your tax liability is crucial. Here are key strategies to help you keep more of your hard-earned money while staying compliant with IRS rules.
Tax-Saving Strategies for Business Owners
Purchasing Assets: Invest in vehicles and equipment that qualify for depreciation to lower your taxable income.
Charitable Giving: Instead of paying a larger tax bill, consider making significant donations to your favorite charity each year to maximize deductions.
Charitable Annuities: High-income taxpayers can use charitable annuities as a way to benefit both themselves and a charity while reducing taxable income.
Retroactive 2024 Tax Deduction Ideas for Everyone
If you’re looking for last-minute ways to reduce your 2024 tax liability, consider these options:
IRA Contributions: Contribute up to $7,000 per person ($8,000 if over 49) by April 15, 2025, and deduct it for 2024. Certain income limits apply.
Individuals in federally declared disaster areas may have an extended deadline—check FEMA.gov for details.
Health Savings Account (HSA) Contributions: If you have a qualified health plan, you can contribute up to $4,150 (single) or $8,300 (family) by April 15, 2025, and deduct it for 2024.
Self-Employed SEP-IRA: Establish and fund a SEP-IRA by your extended tax return due date and contribute up to $69,000 or 25% of income for 2024.
529 Plan Contributions: Some states allow a state tax deduction for 529 contributions made up to April 15, 2025, for the 2024 tax year (though no federal deduction applies).
Home Office Deduction: If you use a dedicated space in your home exclusively for business, you may qualify for a home office deduction for 2024 using actual expenses or the IRS safe harbor method.
Roth IRA for Kids: If your child has earned income, consider funding a Roth IRA for them—even a small deposit like $100 can start their five-year tax-free withdrawal clock early.
Start a 529 Plan for Future Roth Conversion: Opening a 529 Plan for yourself, spouse, child, or grandchild can initiate the 15-year tax-free Roth conversion clock now.
Important Tax Elections with Your 2025 Return:
10T Home Equity Debt Election
Sec. 266 Real Estate Tax Election
Installment Sale Treatment on Real Property
Small Business $2,500 De Minimis Expense Provision
Final Thoughts
There are still plenty of opportunities to lower your 2024 tax bill before filing. The key is taking action now to maximize deductions and reduce taxable income. Need help navigating your options? Schedule a consultation with Jennifer today!
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