When the calendar shifts into the closing quarter taxpayers race to finish the tax year with a clean slate and a favorable balance sheet.
October, November, and December offer a prime window to secure deductions that cut your taxable income in 2024.
Whether you’re a small business owner, a freelancer, or a household with a mortgage and a growing list of expenses the correct actions can slash thousands from the amount you owe.
The following time‑sensitive strategies help you maximize deductions before year‑end.
1. Compile a “Last‑Moment” 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 The key is to capture everything before the December 31st deadline even modest expenses can stack up alongside other deductions.
2. Accelerate Capital Spending Should your business have a capital budget, think about purchasing 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 offers 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. Contribute before the April 15th deadline to cut 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 especially useful for self‑employed individuals and small business owners looking to contribute a larger percentage of income
Note that contributions by December 31st are credited to the 2024 tax year, so do not postpone until the final moment.
4. Use the “Home‑Office” Deduction Wisely 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 mortgage interest, property taxes, insurance, and a portion of your internet bill Record detailed logs of business against personal use to substantiate your claim
5. Capture 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. Watch out for the “wash‑sale” rule: purchasing the same or a substantially identical security within 30 days before or after the sale disallows the loss.
6. Donate Cash and Non‑Cash Assets 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. If you donate appreciated securities, you can avoid capital gains tax on the appreciation while still receiving 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. Take Advantage of “Holiday” Deductions The holiday season can create legitimate business expenses that many overlook: Gifts for employees or clients (up to $25 per person each year) Marketing and promotional materials sent out during the holidays Travel and lodging for business trips over 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. Examine Medical & Dental Costs 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, 中小企業経営強化税制 商品 or even elective procedures before year‑end. Save all receipts, as you’ll need them to verify 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 can be especially useful if you have a large deduction that brings your tax liability below zero; you can use the overpayment to offset the next year’s tax.
10. Monitor Tax Law Updates Tax law is dynamic, and last‑quarter changes can affect deductions. For instance, the Tax Cuts and Jobs Act (TCJA) may still have provisions phased out by 2025 Stay informed about any extensions or modifications by checking IRS updates or consulting a tax professional.
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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 speeding capital expenditures, maximizing retirement contributions, harvesting tax losses, and exploiting charitable giving, you can reduce your taxable income and keep more of your hard‑earned money Plan, act, and document—then unwind and enjoy the tax savings that stem from a well‑executed strategy.
