5 Tax Deductions You Might Be Missing in 2024
Tax season is stressful, but don’t leave money on the table!
Whether you're a solopreneur or managing a team, these overlooked deductions can help lower your tax bill.
1. Home Office Deduction
Do you regularly work from home? You might be eligible to deduct expenses like a portion of your rent, utilities, and even internet. To qualify, the space must be used exclusively and regularly for business purposes. Even renters can benefit, and the deduction can be calculated using the simplified option or detailed reporting through Form 8829.
2. Qualified Business Income (QBI) Deduction
The QBI deduction allows eligible taxpayers to deduct up to 20% of their business income. This applies to sole proprietorships, partnerships, S corporations, and some trusts. The calculation depends on your taxable income and type of business, so consulting with a tax pro is a must.
3. Startup Costs
If your business is relatively new, you can deduct costs related to launching it—like market research, legal fees, and marketing expenses. Typically, you can deduct up to $5,000 of these costs in your first year, with the remainder amortized over time.
4. Employee Benefits and Retirement Contributions
Employer contributions to retirement plans (like SEP IRAs or SIMPLE IRAs) for yourself or your employees are deductible. Plus, you might qualify for the Small Employer Pension Plan Startup Cost Credit to offset setup fees. Health insurance premiums paid for employees are also deductible.
5. Vehicle and Mileage Expenses
If you use your personal vehicle for business, you can deduct either the standard mileage rate (currently 67 cents per mile) or actual vehicle expenses (like gas and maintenance). Keep a log to document business-related trips—it’s key to claiming this deduction accurately.
Pro Tip: Stay Organized Year-Round
Tracking your expenses, saving receipts, and consulting with a tax expert early on can help ensure you’re claiming all the deductions you're entitled to. A few small steps now can lead to big savings when you file! At Prism Consulting, we offer comprehensive bookkeeping services and tax advisory, so you can feel confident that your numbers are accurate and optimized for maximum tax savings.
Need Personalized Tax Help?
Contact us at Prism Consulting for expert guidance tailored to your business.
