Taxes might not be the most exciting topic, but staying ahead of the latest changes can save you money and prevent headaches. So, what’s new in 2024? Let’s break it down in plain English.
The IRS has increased the standard deduction for 2024:
If you’re a sole proprietor or freelancer who usually takes the standard deduction, this could lower your taxable income.
Got your eye on a new business laptop, equipment, or even a company vehicle? You’re in luck! The Section 179 deduction limit is now $1.22 million (up from $1.16 million in 2023). This means you can deduct the full cost of qualifying business purchases immediately instead of spreading the deduction over several years.
Speaking of deductions, bonus depreciation (which lets you write off big purchases fast) has decreased from 80% to 60% in 2024. If you’re planning major investments, you’ll still get a good deduction, but it’s not as generous as before.
Saving for retirement? Good news! The IRS has raised contribution limits for retirement plans:
Remember the temporary 100% deduction for business meals? That’s gone. In 2024, we’re back to the usual 50% deduction on meals for business purposes. So, keep those receipts, but know you’ll only be able to write off half the cost.
If you’re making energy-efficient improvements to your business—like installing solar panels, upgrading to energy-efficient HVAC systems, or using electric vehicles—you may qualify for new or extended tax credits. The IRS is offering incentives to help businesses go green.
If you accept digital payments (like PayPal, Venmo, or credit card transactions), keep an eye on the 1099-K reporting rule. The IRS is still adjusting its approach, but businesses receiving over $5,000 in third-party payments may get a 1099-K (down from the proposed $600 limit).
✅ Plan Purchases Wisely – If you need new equipment, take advantage of the higher Section 179 limits and bonus depreciation while it lasts.
✅ Contribute to Retirement – Higher contribution limits mean more tax-free growth for the future.
✅ Track Business Meals – You can still deduct meals, but only 50%—so budget accordingly.
✅ Consider Energy Upgrades – If you’re thinking about solar panels or EVs, check out the available business tax credits.
✅ Prepare for 1099-K Changes – If you get paid through PayPal, Stripe, or Venmo, be ready for more reporting requirements.
2024 brings some important tax tweaks, but with smart planning, you can keep more money in your business and avoid surprises. Not sure how these changes affect you? A quick chat with a tax pro could help you maximize deductions and avoid pitfalls.
What’s your biggest tax question this year? Contact us today. ?
Calculated Tax Resolution, LLC