There’s Still Time to Save on 2024 Taxes

Even with less than two months left in the year, there are moves business owners can make.

Good Morning!

Here are today’s highlights:    

• Wendy’s offers an example of how businesses can use AI.

• Wall Street responded to Trump’s victory with one of its biggest days ever.

• Will Elon Musk bring his shock-and-awe approach to federal spending?

• The Fed is expected to deliver another rate cut today. But what it will do after that is less clear.

TAXES

Gene Marks says it’s not too late for business owners to save on their 2024 taxes: “My smartest clients are always thinking ahead. And the smartest accountants I know urge their clients to plan ahead on their taxes. With two months left in 2024, here are a few tax moves to consider that may save you money.”

• “Health insurance costs are projected to increase by as much as 9 percent next year. But Ray Minich, a certified public accountant based in Doylestown, [Pa.] says you may be able to use this increase to save on taxes. He recommends contributing as much as possible to your employees’ group health insurance plan, which may reduce payroll and Medicare taxes for the employer and employee. ‘So instead of giving an employee a raise, you should put more into their health insurance contribution,’ he said.”

• “Even though the deduction has decreased since the expiration of the 2017 Tax Cuts and Jobs Act, there are still significant opportunities to write off the cost of your company’s capital expenditures. Businesses can deduct the value of a purchase in the year it was placed in service — when it’s first available for the business to use. For 2024, the limit is $1.22 million, with a phaseout starting at $3.05 million in qualifying equipment. Bonus depreciation, which can be applied after that deduction limit is reached, allows businesses to deduct 60 percent of the cost of qualifying assets in 2024.”

• “One thing that always frustrates accountants is when clients don’t pay their estimated taxes timely. ‘I’ve got people who walk in here and they write a check on April 15 with their extension for their entire tax bill and they’ll wonder why they got a $10,000 penalty,’ Minich said. ‘That penalty is like taking dollar bills, putting it in your grill outside and burning it.’ You’re responsible for paying in 110 percent of your prior year taxes or 90 percent of your current year taxes.”

• “The Inflation Reduction Act and other recent legislation provides tax credits for installing energy-efficient equipment, renewable energy sources, and sustainable building practices. It also includes tax credits for purchasing new and used electric fleet vehicles, he noted. The act also provides a tax deduction to businesses that make energy-efficient upgrades to commercial properties. Deductions of up to $5 per square foot are available for energy-efficient improvements that reduce energy use by at least 50 percent.” READ MORE