As a new year begins, small business owners find themselves grappling with changes in tax regulations set forth by the Internal Revenue Service.
Staying informed about these adjustments is important to ensuring compliance and minimizing financial burdens.
1. Increased standard deductions
For the tax year 2024, the standard deductions for both single and married filers have seen a modest uptick. Single filers can now claim a standard deduction of $13,600, while married couples filing jointly enjoy an increased deduction of $27,200. These adjustments aim to alleviate the tax burden on individual taxpayers, providing a bit of relief for small business owners who file their returns using the standard deduction.
2. Revised mileage rates
Small business owners who frequently use their vehicles for business purposes will need to take note of the updated mileage rates. The IRS revised the standard mileage rate to 58 cents per mile, a slight increase from the previous year. This rate applies to business-related transportation expenses, such as travel to client meetings or supply runs.
3. Employer tax credits
In a bid to incentivize small businesses to provide certain employee benefits, the IRS introduced new tax credits. Employers offering paid family and medical leave, adoption assistance, or educational assistance to their workforce may be eligible for these credits. Small business owners must evaluate whether they qualify for these credits and take advantage of potential savings.
As one of the 33,185,550 small businesses in the U.S., staying on top of taxes is a necessity for smooth operations. While navigating tax changes in 2024, it is reassuring to know that assistance is available in case of any discrepancies.