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Last-Quarter Tax Deduction Playbook
When the calendar shifts into the closing quarter many taxpayers find themselves scrambling to close out the tax year with a clean slate and a favorable balance sheet.
The final three months—October, November, and December—are a prime opportunity to push for deductions that will reduce your taxable income in 2024.
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Whether you run a small business, work as a freelancer, or manage a household with a mortgage and increasing expenses the proper steps can trim thousands from what you owe.
Below are practical, time‑sensitive strategies to maximize deductions before the year ends.
1. Make a "Last‑Minute" Expense Checklist
Start by pulling together every receipt, invoice, and expense record from the past year.
Identify categories that are often overlooked:
Office supplies and equipment
Home‑office expenses (if you qualify)
Health‑related costs (medical, dental, and vision)
Vehicle expenses (business mileage or actual costs)
Professional development (courses, conferences, certifications)
Charitable contributions
Capturing everything before the December 31st deadline is crucial even minor expenses can accumulate when paired with other deductions.
2. Accelerate Capital Expenditures
If your business has a capital budget, you might buy equipment, software, or machinery before year‑end Under Section 179, you can deduct the full cost—up to the limit—of qualifying property in the year it’s placed in service for many small businesses, this can provide a sizable deduction that would otherwise be spread over several years under depreciation.
Should your planned purchase exceed the Section 179 limit or you’re a larger entity, bonus depreciation still lets you take an extra 100% first‑year deduction on qualifying property Be sure to file the correct forms (Form 4562) and confirm the assets satisfy IRS criteria.
3. Make Retirement Plan Contributions
Individual retirement accounts (IRAs) and employer‑sponsored plans such as 401(k)s, SEP‑IRAs, and SIMPLE IRAs all offer tax‑deferred growth and deduction potential. Make a late‑year contribution before the April 15th deadline to reduce your taxable income for 2024.
Traditional IRA: Contributions are deductible up to $7,000 (or $6,500 if you’re under 50) in 2024, based on your income and employer plan involvement
401(k) or similar employer plan: Contributions are limited to $23,000 in 2024, with an additional $7,500 catch‑up contribution allowed for those 50 and older
SEP‑IRA or SIMPLE IRA: These are particularly valuable for self‑employed people and small business owners wishing to contribute a higher portion of income
Remember, contributions made by December 31st count for the 2024 tax year, so don’t wait until the last minute to hit your goal.
4. Maximize the Home‑Office Deduction
If you qualify for the home‑office deduction—i.e., you use a portion of your home exclusively and regularly for business—you can take either the simplified method (square footage) or the regular method (actual costs). In the last quarter, you may have already taken the simplified deduction, but if you’re still within the first year of using the space, you can still switch to the regular method for larger savings.
Key points:
Deduct utilities, rent or 期末 節税対策 mortgage interest, property taxes, insurance, and part of your internet bill
Record detailed logs of business against personal use to substantiate your claim
5. Execute Tax‑Loss Harvesting
If you hold investments that have declined in value, the final quarter is the perfect time to consider a tax‑loss harvesting strategy. By selling a losing investment, you can offset capital gains realized elsewhere in your portfolio, reducing your overall tax liability. Avoid the "wash‑sale" rule: buying the same or a substantially identical security within 30 days before or after the sale negates the loss.
6. Charitable Contributions—Cash & Non‑Cash
Charity can be one of the most powerful deduction tools. Contributions of cash, stocks, or other appreciated assets are often deductible at fair market value, which can reduce the cost basis for the donor.
When you donate appreciated securities, you can dodge capital gains tax on the appreciation and still receive a deduction at full market value
Non‑cash contributions such as clothing, furniture, or vehicles require appraisal by a qualified appraiser if they exceed $500 in value
Keep a written acknowledgment from the charity, and don’t forget to retain the receipt for each contribution
7. Utilize Holiday‑Related Deductions
The holiday season can create legitimate business expenses that many overlook:
Gifts for employees or clients (up to $25 per person annually)
Marketing and promotional materials dispatched during the holidays
Travel and lodging for business trips during Christmas or New Year’s
Be sure to distinguish between personal gifts and business gifts, and keep receipts that clearly show the business purpose.
8. Review Medical and Dental Expenses
If you’re close to reaching the threshold for medical expense deductions—currently 7.5% of adjusted gross income—then the last quarter may be the sweet spot to front‑load expenses. Pay for a deductible health plan, dental work, or even elective procedures before year‑end. Keep all receipts, as you’ll need them to substantiate the deduction.
9. Pay for Taxes Early
If you anticipate owing taxes and want to avoid interest or penalties, consider making a prepayment of estimated tax. The IRS allows you to make a payment by December 31st that will count for the current year. This is particularly helpful if a sizable deduction pushes your tax liability below zero; you can then apply the overpayment to the next year’s tax.
10. Keep an Eye on New Tax Law Changes
Tax law is dynamic, and last‑quarter changes can affect deductions. For example, the Tax Cuts and Jobs Act (TCJA) may still have provisions expiring by 2025 Stay informed about any extensions or modifications by checking IRS updates or consulting a tax professional.
11. Properly Organize and File
Finally, no deduction is worth your time if you can’t document it. File the correct forms—Schedule C, Schedule E, Form 1040, etc.—and attach any necessary supporting documentation. Consider using tax software that flags potential deductions or consult a CPA to review your return before filing.
In conclusion, the last quarter presents a strategic window to reap the benefits of numerous deductions By accelerating capital expenditures, maximizing retirement contributions, harvesting tax losses, and taking advantage of charitable giving, you can lower your taxable income and potentially keep more of your hard‑earned money Plan, act, and document—then sit back and enjoy the tax savings that come from a well‑executed strategy.
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