IRS Deductions: What’s In, What’s Out for 2024 Tax Returns

As a business owner preparing to file your 2024 tax return in 2025, understanding the latest IRS deduction changes can help you maximize savings and avoid surprises. Some deductions have expanded, while others have been reduced or eliminated. Knowing what’s available can make a significant impact on your taxable income. Let’s break down the key deductions for your 2024 return.

What’s In: New & Expanded Deductions

✅ Increased Section 179 Deduction The Section 179 deduction allows businesses to deduct the full cost of qualifying equipment and property immediately rather than depreciating it over time. For your 2024 return, this deduction has increased, meaning if you purchased machinery, office furniture, or business vehicles last year, you may be able to write off more than before.

✅ Higher Standard Mileage Rate If you used a personal vehicle for business in 2024, the IRS has raised the standard mileage rate, allowing for a larger deduction on business-related driving expenses such as client visits, deliveries, and travel.

✅ Qualified Business Income (QBI) Deduction Still Available The 20% deduction for pass-through businesses (S-Corps, LLCs, sole proprietorships) remains in effect for the 2024 tax year. However, income limits and phase-outs may apply, so reviewing your eligibility with a tax professional is crucial.

✅ Work Opportunity Tax Credit (WOTC) Still in Play If you hired employees from targeted groups—such as veterans or long-term unemployed individuals—you may still qualify for the Work Opportunity Tax Credit when filing your 2024 return. Be sure to include this when preparing your taxes.

What’s Out: Deductions & Credits That Have Expired or Been Reduced

❌ Bonus Depreciation Phase-Out Bonus depreciation, which allowed businesses to write off 100% of qualified purchases in the first year, has started to phase out. For your 2024 return, this deduction is reduced to 80%, meaning less immediate savings on large equipment purchases.

❌ Business Meal Deductions Reduced In 2021 and 2022, businesses could deduct 100% of certain meal expenses due to pandemic relief measures. However, for your 2024 tax filing, the deduction is back to 50%, so plan accordingly.

❌ Employee Retention Credit (ERC) No Longer Available The Employee Retention Credit, which helped businesses retain employees during the pandemic, has officially ended. If you were hoping to claim it on your 2024 return, unfortunately, that option is no longer available.

❌ Reduced Deductibility for Research & Development (R&D) Expenses If your business invested in R&D in 2024, you may notice a change in how those expenses are deducted. Instead of fully deducting them in one year, businesses are now required to amortize them over several years, potentially increasing your taxable income for 2024.

Maximize Your Tax Savings for 2024

Filing your 2024 return in 2025 means you still have time to ensure you’re getting every deduction available. Here’s how you can make the most of your tax situation:

• Review your expenses – Ensure all deductible business expenses from 2024 are properly documented.

• Confirm eligibility for credits – Double-check if you qualify for deductions like the QBI or WOTC before filing.

• Work with a tax professional – Tax laws are complex, and getting expert advice can help you optimize your return and reduce liability.

Have Questions? Let’s Talk!

Navigating tax deductions can be tricky, but you don’t have to do it alone. If you want to ensure you're maximizing your tax savings while staying compliant, reach out for a consultation before you file.

📩 Need assistance with your 2024 return? Contact us today!

#TaxDeductions #BusinessTaxes #TaxFiling2025 #SmallBusinessTaxes