As a small business owner, staying on top of available tax breaks can significantly impact your bottom line. Here are some of the top tax breaks available in 2024 that you should be aware of to maximize your savings.
1. Home Office Deduction
The home office deduction is a valuable benefit for small business owners who operate from their homes. You can choose between two methods: the simplified method, which allows a deduction of $5 per square foot of your home office up to 300 square feet, and the regular method, which involves calculating actual expenses related to your home office​.
2. Retirement Plan Contributions
Contributing to retirement plans not only secures your future but also provides immediate tax benefits. For example, in 2024, you can contribute up to $23,000 to a 401(k) plan (or $30,500 if you’re 50 or older) and deduct these contributions from your taxable income​.
3. Depreciation
Depreciation allows you to deduct the cost of business assets over time. In 2024, you can deduct up to 100% of the depreciation expense for certain assets like equipment and vehicles. This deduction can be significant, especially for businesses with substantial investments in physical assets​.
4. Health Insurance
Small businesses can deduct the full cost of health insurance premiums paid for employees. This deduction can significantly reduce your taxable income, making it a crucial benefit for businesses offering health benefits​.
5. Meals
While meals are typically 50% deductible, certain business-related meals, such as those provided during company-wide events, are 100% deductible. This benefit can help offset the cost of fostering employee engagement and morale​.
By understanding and utilizing these tax breaks, small business owners can reduce their tax liabilities and reinvest the savings into their businesses. For personalized advice and assistance with your tax planning, contact Walker Tax and Bookkeeping today.
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