Tax season is upon us, but so is the new year. As such, businesses must evaluate their tax planning strategies to optimize returns for the 2024 tax season. Given the economic shifts, tax laws, and legislative changes, there’s a lot to consider to ensure your business is positioned for maximum tax efficiency next year — and no, it’s never too early! Here are some essential tips and strategies to help you prepare:

Understand New Tax Laws and Opportunities

Increased Section 179 Expensing Limits

The maximum deduction under Section 179 is set to increase to $1.29 million, with the phaseout threshold rising to $3.22 million. This adjustment encourages businesses to invest in equipment by allowing for larger immediate deductions.

Adjustments to Business Interest Deductions

The limitation on business interest deductions will shift to a less restrictive 30 percent of EBITDA (earnings before interest, taxes, depreciation, and amortization), providing more flexibility for businesses managing their net interest expenses.

Potential Enhanced Child Tax Credit (CTC) for 2024

There’s potential for an enhanced child tax credit that could benefit around 15 million children in the U.S., pending legislative approval. This change could offer significant tax relief for eligible families. Be sure to check back on this when it’s time to file 2024 taxes; it hasn’t been passed yet.

Delayed $600 Rule for 1099-K Reporting

The implementation of the $600 threshold for issuing 1099-K forms has been postponed. This delay affects businesses and individuals who conduct transactions through third-party networks like PayPal or Venmo, reducing immediate reporting burdens.

2024 Inflation Adjustments

The IRS has made several inflation adjustments for tax year 2024, affecting various tax provisions. These adjustments are designed to reflect changes in the cost of living and can influence tax liabilities and strategic planning for businesses. As we get further into the year, more information about this will be available.

Strategic Tax Planning Tips for 2024

Invest in Tax-Efficient Accounts

With interest rates still on the rise, consider the tax implications of investing in interest-bearing vehicles. Accounts like money market funds or CDs can generate significant taxable income, which should be factored into tax planning strategies.

Leverage Retirement Plan Contributions

The Secure Act 2.0 has expanded the use of 529 accounts and allowed for more flexibility in employer contributions to retirement plans. These changes can provide additional avenues for tax-efficient saving and investment.

Prepare for TCJA Sunset Provisions

The impending sunsetting of certain provisions of the Tax Cuts and Jobs Act (TCJA) will be a critical area of focus. Businesses should stay informed about which benefits may be expiring and plan accordingly.

Need Some Help Optimizing for 2024? Seek Professional Assistance with New Tax Laws

With the complexity of the tax code and the ever-changing regulatory environment, it’s wise for businesses to seek professional guidance. Tax professionals can provide insights tailored to your specific situation, ensuring compliance while optimizing tax strategies for 2024. Whether you’re adjusting to new deductions, navigating interest expense limitations, or evaluating investment strategies, a tax advisor can be an invaluable resource.

For personalized tax planning and advisory services, consider reaching out to a reputable firm like NTRC Tax & Finance. Our team of experts stays at the forefront of tax legislation and planning strategies to support your business’s financial health and growth.

Contact us today to prepare for the 2024 tax season with confidence!

Schedule a Consultation

Share This

Share this post with your friends!