Year-End Tax Checklist

2024 limit: $23,000 (+ $7,500 catch-up if 50+). Employee deferrals must be elected and contributed by Dec 31.

Equipment must be in service by Dec 31 to deduct this year. 2024 §179 limit: $1,220,000. Bonus depreciation: 60% for 2024.

Measure your dedicated office room and total home square footage. Take dated photos. Required for Form 8829 or simplified method ($5/sq ft, max 300 sq ft).

2024 IRS standard rate: 67¢/mile. Each entry needs: date, destination, business purpose, odometer or trip miles. Export from app or complete spreadsheet.

Cash donations need a bank record or written receipt. Donations $250+ need a contemporaneous written acknowledgment — get this before Dec 31.

Cash-basis taxpayers generally can't deduct bad debts. Accrual-basis businesses can deduct receivables that are genuinely uncollectible — document collection attempts.

If you're cash-basis (most freelancers), only expenses actually paid by Dec 31 count for this tax year. Prepaid subscriptions, software, and supplies qualify.

CA, IL, and others may have Q4 state estimated taxes due Dec 31. Check your state's department of revenue — missing the state deadline is a common mistake.

IRS Form 1040-ES. Pay at IRS Direct Pay or EFTPS. If you'll file and pay by Feb 1, you can skip this Q4 payment — but only if you file before Feb 1.

Due to recipients Jan 31 and to the IRS Jan 31 (e-file). Need their W-9 on file. Penalty: $60–$310/form for late filing, up to $3.78M.

Due from clients by Jan 31. If not received, follow up immediately — you still owe tax on the income even without the form. Use your own records to reconcile.

2024 threshold: $5,000 (transitional relief). 2025 threshold: $2,500. Reconcile against your own records — platforms sometimes include personal transactions.

Every transaction needs a category. Unexplained deposits create phantom income. Export CSVs from all accounts and match to invoices and receipts.

Distribute to employees and file with SSA by Jan 31. Use payroll software or a payroll service — late W-2 penalties start at $60/form.

2024 SEP-IRA limit: 25% of net self-employment income, up to $69,000. SEP contributions can be made up to the filing deadline including extensions (Oct 15 if extended). Solo 401k employer contributions are also due by the filing deadline.

IRC §162(l) above-the-line deduction. Covers you, spouse, and dependents. Cannot exceed your net self-employment income. Not available for months you were eligible for employer-subsidized coverage.

One Schedule C per separate business activity. Lists all income and deductions. Net profit flows to Form 1040 and drives SE tax. Keep records 3–7 years.

SE tax = Schedule C net profit × 0.9235 × 15.3%. You can deduct half (7.65%) as an above-the-line deduction on Form 1040. Social Security portion phases out above $168,600.

Actual method lets you deduct real home expenses (mortgage interest, utilities, repairs) pro-rated by office square footage. Simplified method ($5/sq ft) doesn't require this form.

Required for §179 expensing, bonus depreciation, and multi-year depreciation on assets. Carries forward depreciation schedules from prior years.

20% deduction of qualified business income for pass-through entities (sole props, S-corps, partnerships). Income limits and SSTB restrictions apply above ~$182k single / $364k MFJ (2024). Verify your CPA claims it.

Unpaid tax after April 15 accrues 0.5%/month failure-to-pay penalty plus interest. If you need more time to file, submit Form 4868 for an extension — but this does NOT extend the time to pay.

Automatic 6-month extension to Oct 15 for filing only. Must estimate and pay the tax owed by April 15 to avoid penalties. Free via IRS Free File.