As a freelancer, your year-end hustle isn't just about completing projects or hitting income goals—it’s also about getting your finances in order. Tax season will be here before you know it, and the actions you take now can set you up for big savings when it’s time to file. Let’s dive into some smart, actionable tax strategies to help you close 2024 on a high note.
1. Max Out Deductions Before December 31st
Freelancers have a goldmine of potential deductions. Whether it’s home office expenses, software subscriptions, professional development, or travel related to your business, now’s the time to review your records and make sure you’re capturing every deductible expense.
Need new equipment? Thinking about upgrading your laptop or investing in tools to grow your business? Purchasing them before the end of the year could lower your taxable income for 2024.
2. Contribute to a Retirement Account
Freelancers don’t get the luxury of employer-matched 401(k)s—but you can still take advantage of tax-friendly retirement accounts. Contributions to a SEP-IRA, Solo 401(k), or a traditional IRA not only prepare you for the future but also reduce your taxable income. For 2024, you can contribute up to $66,000 to a Solo 401(k), depending on your income.
Don’t have one set up yet? No worries! It’s not too late to open and fund these accounts.
3. Pre-Pay Business Expenses
If you anticipate a higher income in 2024 than 2025, pre-paying for business expenses like advertising, subscriptions, or even insurance can help you lower your taxable income for the current year.
4. Review Your Quarterly Taxes
As a freelancer, you’re responsible for paying estimated taxes quarterly. If your income has been higher than expected this year, make sure your fourth-quarter payment reflects that. Adjusting now can help you avoid penalties later.
5. Take Advantage of the QBI Deduction
The Qualified Business Income (QBI) deduction allows eligible freelancers and small business owners to deduct up to 20% of their business income. If your taxable income is below the threshold (for 2024, that’s $182,100 for single filers or $364,200 for joint filers), you may qualify. Strategic planning now can help you stay within those limits and maximize this benefit.
6. Organize Your Records
An organized tax filing process starts with well-maintained records. Use this time to review your income statements, receipts, and expense logs. Clean up your bookkeeping so you’re ready to file accurately and on time.
7. Consult a Tax Professional
Tax laws can be complex, and as a freelancer, your situation may involve unique challenges or opportunities. From navigating deductions to optimizing your business structure for tax savings, a tax professional can help you uncover strategies tailored to your specific needs.
By taking proactive steps now, you can reduce your tax burden and keep more of your hard-earned money. At J.S. Tax Corporation, we specialize in helping freelancers like you navigate the complexities of tax planning with confidence. Let us take the guesswork out of tax season and create a plan that sets you up for long-term success.
👉 Ready to get started? Book your consultation today at www.jstaxcorp.com/sessions. Let’s make 2024 your most profitable year yet!
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