Tax Hacks 2024-2025: Business Owner's Ultimate Checklist
This comprehensive guide provides small business owners and self-employed individuals with essential tax strategies for 2024-2025. From maximizing deductions to preparing for upcoming tax changes, each section offers actionable insights to optimize your tax position and keep more of what you earn.

by RED WORLDWIDE INC.

Stay Ahead of Tax Changes
Understanding Inflation Adjustments
The IRS adjusts tax brackets, standard deductions, and contribution limits annually based on inflation. For 2024, these adjustments may significantly impact your tax planning strategy. Stay informed about how these changes affect your specific tax situation and adjust your quarterly payments accordingly.
Preparing for TCJA Sunsets
The Tax Cuts and Jobs Act provisions are scheduled to sunset in 2025, potentially increasing individual tax rates and eliminating certain business deductions. Begin planning now by accelerating income into lower-tax years and deferring deductions when strategic.
Anticipating 2026 Changes
Major tax code overhauls expected in 2026 will require comprehensive planning. Consider consulting with a tax professional to create a multi-year strategy that accounts for these upcoming changes and positions your business advantageously.
Maximize Mileage & Travel Deductions
Track Every Business Mile
Use dedicated mileage tracking apps like MileIQ or Everlance to automatically log business trips. These apps create IRS-compliant records that can significantly reduce your audit risk while maximizing your legitimate deduction.
Know Your Rates
For 2024, claim 67¢ per business mile – a substantial increase from previous years. Plan for the projected 2025 rate of 70¢ per mile when budgeting for next year's tax liability.
Document Travel Expenses
Beyond mileage, track all business travel expenses including airfare, lodging, meals (50% deductible), and incidentals. Keep digital copies of receipts and note the business purpose of each trip.
Retirement Contributions
SEP IRA
Contribute up to $69,000 annually (or 25% of compensation, whichever is less). This option is ideal for self-employed individuals with no employees seeking to maximize retirement savings. Setup is simple with minimal paperwork.
Solo 401(k)
Contribute $23,000 as an employee plus an additional employer contribution up to 25% of compensation (subject to combined limits). This dual contribution approach often allows higher total contributions than SEP IRAs for the same income level.
Traditional IRA
Contribute up to $7,000 annually ($8,000 if you're 50 or older). While contribution limits are lower, this option can supplement other retirement plans and may offer deductibility depending on your income and other retirement plan participation.
Strategic retirement contributions not only build your long-term wealth but also provide immediate tax advantages by reducing your current taxable income. Consider maximizing contributions near year-end to optimize your tax position.
Digital Income Reporting
2024 Reporting Requirements
Track all income from payment apps (PayPal, Venmo), marketplaces (Etsy, eBay), and cryptocurrency platforms. Report income exceeding $5,000 regardless of transaction count.
2025 Threshold Change
Prepare for the significant threshold reduction to $600 starting in 2025. This will substantially increase the number of transactions requiring 1099-K reporting.
Documentation Strategy
Implement a system to separate personal from business transactions on payment platforms. Maintain detailed records of all digital income sources, including screenshots of transaction histories.
Choose the Right Accounting Method
Cash Method
  • Income counted when received
  • Expenses deducted when paid
  • Simpler recordkeeping requirements
  • Available for businesses with less than $31M in annual revenue
  • Greater control over year-end tax position
Accrual Method
  • Income counted when earned (not necessarily received)
  • Expenses deducted when incurred (not necessarily paid)
  • More accurate financial picture
  • Required for businesses with inventory
  • Better matches income with related expenses
Your accounting method significantly impacts when income is taxable and when expenses are deductible. While most small businesses benefit from the simplicity of cash accounting, growing businesses with inventory or those seeking outside investment often need the accuracy of accrual accounting. Consult with your accountant to determine which method aligns best with your business model and growth trajectory.
Entity & Deduction Strategy

Optimize Income Timing
Control tax year revenue through strategic billing
Annual Entity Review
Reassess business structure as you grow
QBI Deduction
Claim up to 20% for pass-through entities
The Qualified Business Income (QBI) deduction allows eligible pass-through business owners to deduct up to 20% of their business income. This substantial tax benefit has phase-out thresholds for service businesses, so strategic planning is essential. Consider splitting business activities or converting to S-corporation status if your income approaches these thresholds.
Your business entity choice impacts everything from liability protection to tax treatment. As your business evolves, regularly review whether your current structure remains optimal. What works for a startup may not be ideal as you scale or prepare for eventual succession or sale.
Crypto Compliance
Track All Transactions
Maintain detailed records of every cryptocurrency transaction, including trades between different coins, transfers between wallets, and any mining or staking income. Document the date, value in USD at time of transaction, and purpose.
Use Specialized Software
Implement dedicated crypto tax software like CoinTracker or Koinly that can import data directly from exchanges and wallets, calculate cost basis, and generate tax forms. These tools greatly simplify compliance with complex crypto reporting requirements.
Complete Required Tax Forms
Report crypto transactions on Form 8949 and summarize capital gains and losses on Schedule D. Mining, staking, and other crypto income must be reported as business or miscellaneous income depending on your specific situation.
Home Office Hacks
Qualification Requirements
To qualify for home office deductions, your space must be used regularly and exclusively for business. This means the area cannot serve dual purposes (like a guest bedroom that doubles as an office). The space must be your principal place of business or used regularly for client meetings.
Deduction Methods
Simplified Method
$5 per square foot (maximum 300 sq ft)
Easy calculation with minimal documentation
No depreciation recapture when selling home
Regular Method
Deduct actual expenses × business percentage
Includes mortgage interest, taxes, insurance, utilities, repairs
Requires more detailed recordkeeping
Health & Flexible Spending

FSA Contributions
Maximize Flexible Spending Account contributions (projected $3,300 in 2025) with $660 carryover allowance. Use these tax-free funds for qualified medical expenses throughout the year.

HSA Benefits
If eligible, prioritize Health Savings Account contributions: $4,150 for individuals and $8,300 for families. HSAs offer triple tax advantages: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses.

Medical Expense Timing
Strategically time medical expenses to exceed 7.5% of adjusted gross income in a single tax year when possible. Consider bunching elective procedures and purchasing supplies in years when you're likely to exceed this threshold.

Premium Deductions
Self-employed individuals can deduct 100% of health insurance premiums for themselves, spouses, and dependents as an adjustment to income rather than an itemized deduction.
Self-Employment Tax & Estimates
Mark Quarterly Due Dates
Set reminders for April 15, June 15, September 15, and January 15 to make estimated tax payments. Missing these deadlines can result in substantial penalties and interest charges.
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Understand The 15.3% SE Tax
Self-employment tax covers both employer and employee portions of Social Security (12.4%) and Medicare (2.9%). For 2025, the Social Security portion applies to the first $176,100 of net earnings.
Meet Safe Harbor Requirements
Avoid underpayment penalties by paying 100% of last year's tax liability (110% if your AGI exceeds $150,000) through estimated payments and withholding.
Calculate Payments Accurately
Use Form 1040-ES worksheets or tax software to project your annual tax liability and divide into quarterly payments. Adjust throughout the year as your income fluctuates.
Family & Education Credits
Adoption Credit
If you're expanding your family through adoption, claim up to $17,280 per child in qualified adoption expenses. This substantial credit directly reduces your tax liability dollar-for-dollar and may be carried forward for up to five years if you can't use the full amount in the current year.
Child Tax Credit
Claim $2,000 per qualifying child under 17. This partially refundable credit phases out at higher income levels. Remember that children must have valid Social Security numbers to qualify, and you must provide more than half of their support.
Education Credits
The American Opportunity Credit offers up to $2,500 per eligible student for the first four years of higher education. The Lifetime Learning Credit provides up to $2,000 per tax return for undergraduate, graduate, and professional development courses.
These family-focused tax benefits can significantly reduce your overall tax burden while supporting your personal and professional development goals. Be sure to maintain thorough documentation of all qualifying expenses throughout the year.
Tech Tools for Tax Efficiency
Receipt Management
Use apps like Expensify or Receipt Bank to digitize and categorize receipts instantly. These tools use OCR technology to extract key information and integrate with accounting software, eliminating manual data entry.
Cloud Accounting
Implement cloud-based accounting solutions like QuickBooks Online or Xero for real-time financial insights. These platforms automate bank feeds, categorize transactions, and generate tax-ready reports.
IRS Digital Tools
Create an IRS online account to access tax records, make payments, and view payment history. Sign up for electronic filing and direct deposit to speed up refunds and streamline compliance.
Implementing these digital tools creates a systematic approach to tax preparation that reduces stress, minimizes errors, and ensures you capture every legitimate deduction. The time invested in setting up these systems will pay dividends through smoother tax seasons and more accurate financial reporting.