9 Post-Year-End Tax Strategies for Your 2024 Returns

As the calendar turns to 2025, businesses may feel they’ve missed the window for tax-saving opportunities related to their 2024 returns. But several strategies remain viable even after Dec. 31, 2024! Implementing these post-year-end tax strategies can help optimize your financial position and set a strong financial foundation for the new year.

1. Retirement Plan Contributions

While many tax-saving actions must occur before year-end, certain retirement plan contributions can still be made after Dec. 31 and applied to your 2024 tax return.

• Traditional and Roth IRAs: Contributions for the 2024 tax year can be made until April 15, 2025. For 2024, the contribution limit is $7,000, with an additional $1,000 catch-up contribution allowed for individuals aged 50 and over. Traditional IRA contributions may be tax-deductible, reducing your taxable income for 2024 (depending on your income level and participation in employer-sponsored retirement plans).
• SEP IRAs and Solo 401(k)s: If you’re self-employed or own a small business, you can establish and contribute to a SEP IRA or Solo 401(k) by the extended due date of your tax return, including extensions. For SEP IRAs, contributions are generally limited to 25% of compensation, up to a maximum of $66,000 for 2024. Solo 401(k) plans have similar limits, with additional catch-up contributions allowed for those aged 50 and over.

2. Health Savings Account (HSA) Contributions

If you have a high-deductible health plan (HDHP), contributing to a health savings account (HSA) can provide tax benefits. For 2024, the contribution limits are $4,150 for individual coverage and $8,300 for family coverage, with an additional $1,000 catch-up contribution for individuals aged 55 and older. Contributions for the 2024 tax year can be made until April 15, 2025, and are tax-deductible, reducing your taxable income.

3. Accounting Method Changes

Certain accounting method changes can be implemented after year-end to optimize your tax situation. For example, if you haven’t yet adopted the cash method of accounting and it would be beneficial, you can file Form 3115, Application for Change in Accounting Method, with your 2024 tax return. This change can impact the timing of income and deductions, potentially deferring taxable income to future years.

4. Review of Fixed Asset Depreciation

Conduct a thorough review of your fixed asset depreciation schedules. If you discover assets that were placed in service in 2024 but not properly depreciated, you can correct this by filing Form 3115 with your 2024 return to claim a “catch-up” depreciation deduction. This ensures you’re maximizing your allowable deductions.

5. Bad Debt Deductions

If you have accounts receivable that became uncollectible in 2024, you can still write them off as bad debts on your 2024 return. Ensure you have adequate documentation to support the deduction, demonstrating that the debt is indeed worthless and that you’ve made reasonable efforts to collect it.

6. Retirement Plan Establishment for 2025

While contributions to certain retirement plans for 2024 may no longer be possible after year-end, it’s an excellent time to establish or review retirement plans for 2025. Setting up a 401(k) or SEP IRA early in the year allows for strategic planning and maximization of contributions, providing tax benefits for the upcoming year.

7. State and Local Tax Considerations

Review any state-specific tax provisions that may allow for post-year-end actions affecting your 2024 return. Some states have different deadlines or provisions for certain deductions and credits. Consult with a tax professional familiar with your state’s tax laws to identify any additional opportunities.

8. Review of Estimated Tax Payments and Withholding

Assess whether your estimated tax payments and withholding for 2024 were sufficient. If you underpaid, you might be subject to penalties. Filing Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, with your return can help calculate any penalties owed and determine if you qualify for an exception to the penalty.

9. Engage with a Tax Professional

Navigating post-year-end tax strategies can be a complicated undertaking. Working with a CPA or tax professional can provide personalized guidance tailored to your business’s unique circumstances, ensuring compliance and optimization of available tax benefits.

While the end of the calendar year closes many tax planning opportunities, several strategies remain available to business tax filers after Jan. 1. By focusing on retirement contributions, accounting method adjustments, depreciation reviews and other post-year-end actions, you can still positively impact your 2024 tax return.

A proactive stance with post-year-end tax strategies — and consultation with a business tax expert — is key to finding significant tax savings. Reach out to the James Moore business tax team for help.

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