How Local Business Owners Are Maximizing Their Tax Benefits by Esteemed Financial

As recommended by Esteemed Financial, Tax season can be overwhelming for local business owners, but it’s also an opportunity to maximize tax benefits and reduce liabilities. In 2024, with some new tax laws and a few adjustments, business owners are finding creative ways to take advantage of every potential deduction and credit available to them Here’s how savvy local entrepreneurs are optimizing their tax benefits

One primary strategy business owners use is taking full advantage of tax deductions The IRS offers a variety of deductions for expenses related to the operation of a business Local business owners can deduct costs for office supplies, business travel, and equipment purchases. In 2024, the threshold for Section 179 deductions has increased, allowing businesses to immediately deduct the cost of qualifying assets up to a specific limit, such as machinery, software, or even vehicles This can result in significant savings in the year the assets are purchased rather than depreciating them over time.

Another key strategy is utilizing the Qualified Business Income (QBI) deduction The QBI deduction allows owners to deduct up to 20% of their qualified business income for pass-through entities like sole proprietorships, partnerships, and S corporations. In 2024, there are some updates to how this deduction is applied, particularly for those in service industries Owners are encouraged to keep detailed records to maximize their eligibility for this valuable deduction.

Local business owners also leverage tax credits to incentivize growth and job creation The Employee Retention Credit, for example, has been extended for some businesses, offering a substantial refund for companies that retained workers during challenging periods. In 2024, enterprises investing in sustainable practices or offering electric vehicle charging stations may also qualify for new energy credits, further reducing their tax liability

Finally, some business owners turn to tax professionals or accountants specializing in local tax laws These experts can help uncover additional benefits, ensure compliance, and avoid costly mistakes Local business owners can minimize taxes and keep more money in their pockets by staying informed about tax law changes and strategic planning.