April is not the time to talk about taxes. Now is the time. Why? Because we’re about halfway through the year. We can make decisions and have enough time to take action. What kinds of action? If you’re running a business, here are five suggestions. My suggestion is to meet with your accountant now and discuss these five strategies for reducing your 2024 tax bill.
Buy equipment now — not later
The 2017 Tax Cuts And Jobs Act created an enormous first-year depreciation deduction for businesses purchasing and placing into service eligible equipment such as machinery and equipment, office furniture, computers and computer software, vehicles used for business purposes and certain property improvements. Starting last year, the benefit began to decline. In 2023, businesses were allowed to deduct 80% of a first year’s purchase, with the remaining amount being amortized over the life of the asset. In 2024, the first-year deduction percentage dropped to 60% up to $1,220,000; the following year, it dropped to 40% before it was eliminated entirely.
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