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2024 Tax Filing Updates: Essential Information for Small Business Owners

Writer's picture: Cherie SaybanCherie Sayban

As we approach the 2024 tax filing season, it's crucial for small business owners to stay informed about the latest tax updates. Changes in tax laws, updated regulations, and new filing requirements can significantly impact how you prepare and file your taxes. From an expert tax preparer's perspective, here are the key updates small business owners need to know for the 2024 tax year.


2024 tax filing updates for small business owners

1. New Tax Filing Deadlines

For the 2024 tax year, the IRS has maintained the usual deadlines:


  • March 15, 2024: Deadline for S corporations (Form 1120S) and partnerships (Form 1065) to file their returns.


  • April 15, 2024: Deadline for individual tax returns (Form 1040), sole proprietors, and C corporations (Form 1120).


If these dates fall on a weekend or a federal holiday, the deadline typically extends to the next business day. Make sure to mark these dates on your calendar and plan accordingly to avoid any late filing penalties.


2. Increased Standard Deduction

For 2024, the IRS has adjusted the standard deduction to account for inflation. Here are the new amounts:


  • Single Filers: $14,000 (up from $13,850 in 2023)

  • Married Filing Jointly: $28,000 (up from $27,700 in 2023)

  • Head of Household: $20,000 (up from $20,800 in 2023)

  • Small business owners who operate as sole proprietors may benefit from this increase, reducing their taxable income if they opt not to itemize deductions.


3. Changes to Business Deductions and Credits

Several deductions and credits available to small businesses have been updated:


  • From the IRS Publication 946: The max deduction is $1,220,000 & the phase out is $3,050,000. This allows businesses to deduct the full cost of qualifying equipment or software purchased during the year.


  • From IRS.gov: Single or Married Filing Separate $14,600 (an increase of $750), MFJ $29,200 (an increase of $1,500), and HOH $21,900 (an increase of $1,100).


  • Bonus Depreciation: The bonus depreciation rate remains at 80% for assets placed in service in 2024. This rate will continue to decrease annually until it is phased out by 2027 unless Congress takes action to extend it.


  • Research and Development (R&D) Credit: Small businesses that invest in research and development can still take advantage of this credit. However, the requirement to amortize R&D expenses over five years, introduced in 2022, remains in effect. This rule may impact your cash flow, so plan accordingly.


4. Updated Mileage Rates

The IRS has updated the standard mileage rates for 2024. These rates are used to calculate the deductible costs of operating an automobile for business purposes:


  • 58 cents per mile for business miles driven (up from 65.5 cents in 2023)


It's important for small business owners to keep accurate records of their mileage throughout the year to maximize this deduction.


5. Retirement Plan Contribution Limits

The contribution limits for retirement plans have also been increased for 2024. Small business owners who offer retirement plans to their employees or contribute to their own plans should note the following changes:


  • 401(k) Elective Deferrals: The limit is now $23,000 (up from $22,500 in 2023), with a catch-up contribution of $7,500 for those aged 50 and over.


  • SIMPLE IRA Contributions: The limit has increased to $16,500 (up from $15,500 in 2023), with a catch-up contribution of $3,500.


Contributing to a retirement plan not only helps save for the future but can also provide substantial tax benefits.


6. Health Insurance Premium Deduction

For self-employed individuals, the deduction for health insurance premiums remains available. This allows small business owners to deduct the premiums paid for health insurance for themselves, their spouses, and dependents. Make sure to keep all records and receipts of your health insurance payments to substantiate your deduction.


7. New Reporting Requirements for Third-Party Payment Processors

Beginning in 2024, third-party payment processors like PayPal, Venmo, and Square must report transactions exceeding $600 annually to the IRS, regardless of the number of transactions. This is a significant change from the previous threshold of 200 transactions totaling more than $20,000. Small business owners using these platforms need to be diligent in tracking their income and expenses to ensure proper reporting.


8. Stay Prepared for Potential Legislative Changes

While these updates are current as of now, it's essential to stay vigilant for any additional changes or new legislation that may impact your tax obligations. The IRS and Congress often introduce new rules or modify existing ones, especially towards the end of the year. Partnering with a knowledgeable tax professional can help you stay ahead of these changes.


tax filing for small business owners

Navigating the 2024 tax filing season can be daunting, especially with the numerous updates and changes. As a small business owner, staying informed and proactive about your tax obligations is critical to minimizing your tax liability and avoiding costly mistakes. By understanding these updates and consulting with a tax professional, you can ensure a smooth and compliant tax filing experience.


Remember, the best way to stay ahead is to keep accurate records throughout the year, seek professional advice when needed, and remain informed about the latest tax laws and regulations. Here's to a successful and stress-free 2024 tax season!


Feel free to share this article with your fellow small business owners, and don’t hesitate to reach out to me at Cherie@CherieSaybanCPA.com if you have any questions or need assistance with your tax planning and preparation.


About the Author


Cherie Sayban, Certified Public Accountant in Atlanta

Cherie Sayban is a certified public accountant. She has over 25+ years of experience in Finance, Accounting and Bookkeeping.  


Cherie Sayban CPA provides various financial and accounting solutions to small and mid-size businesses. Our portfolio includes: tax preparation, payroll preparation, accounts receivable and payables, general ledger, and QuickBooks . Our bookkeeping workshops are offered both in-person and virtually.


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