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Last-Minute Tax Tips for Lawyers: What You Can Still Do Before the Year Ends
It’s the last day of the year, and while many are ringing in the New Year, there’s still time for you to take crucial steps to reduce your 2024 tax liability. Whether you’re a solo attorney or a managing partner, the last few hours of the year are your final chance to implement some strategic tax moves that could save you thousands of dollars.
Don’t let 2024 slip by without taking advantage of these last-minute tax tips. Here’s what you can still do today to maximize your deductions and minimize your tax burden before the clock strikes midnight.
1. Make Final Contributions to SEP IRAs or Solo 401(k)s
One of the easiest ways to reduce your taxable income at the last minute is by making a final contribution to your retirement account. Contributions to SEP IRAs, Solo 401(k)s, or other retirement plans are still tax-deductible for the year—as long as you make them before midnight.
What you can do today:
- If you have a Solo 401(k) or SEP IRA, make a final contribution to lower your taxable income. You can contribute up to 25% of your net earnings, with a limit of $69,000 for 2024.
- Max out catch-up contributions if you’re over 50. This extra $7,000 for Solo 401(k)s can help you further reduce your taxable income.
Pro Tip: If you’re planning to make a wire transfer or an online contribution, make sure it’s completed before midnight to ensure it counts for 2024.
2. Prepay Office Expenses to Lock In Deductions for 2024
If your firm operates on a cash-basis accounting method, you can still make prepayments for office expenses today to lock in deductions for this year. Even though it’s the last day, prepaying for expenses like rent, office supplies, or software can reduce your tax liability.
Expenses you can prepay today:
- Office rent: Prepay January or February’s rent for 2025 and claim the deduction in 2024.
- Office supplies: Stock up on supplies or tech gadgets—anything you purchase today can count as a deduction.
- Software subscriptions: If you rely on legal software platforms, prepaying for your 2025 subscription now allows you to claim the deduction today.
Pro Tip: Many office supply stores and software companies allow online purchases, so even if you’re home, you can still make these deductible purchases before midnight.
3. Defer Invoicing Clients to Push Income Into 2025
If you’re on the verge of entering a higher tax bracket for 2024, today is your last chance to defer some income into 2025. By pushing income into the new year, you can reduce your taxable income for 2024 and possibly avoid paying higher taxes.
How to defer income today:
- Delay invoicing: If you’re about to invoice a client or receive payment for a completed case, consider waiting until January 1 to issue the invoice. This will push the income into 2025.
- Hold off on receiving settlements: If you’re expecting a settlement payment, negotiate with the other parties to defer receipt until the first day of 2025.
Pro Tip: Deferring income only works if you operate on a cash-basis accounting method and your clients haven’t already paid. Make sure to consult with your CPA if you’re unsure.
4. Ensure Charitable Contributions Are Finalized and Documented
Charitable donations made today still count for your 2024 taxes, giving you one last chance to make a difference in your community and reduce your tax bill. Contributions made to qualified charities are fully deductible, but you must document everything before the year ends.
What you can do now:
- Make online donations: Many charities accept online donations through their websites, and these contributions are tax-deductible if made before midnight.
- Donate non-cash items: If you’re donating office furniture, supplies, or technology, make sure to document the fair market value of these items and get a receipt from the organization.
Pro Tip: If you’re making a cash donation of more than $250, the IRS requires a written acknowledgement from the charity, so make sure to request that before the year ends.
5. Update Your Tax Strategy with Your CPA—It’s Not Too Late!
Even though it’s December 31, it’s still a great time to consult with your CPA to review your current tax strategy and make sure you’re not missing any last-minute opportunities. Your CPA can guide you on any deductions or credits you can still take advantage of before the clock runs out.
What to review today:
- Tax projections: Check your tax projections with your CPA to see if you need to make any adjustments to estimated tax payments before the year ends.
- Year-end deductions: Ensure that you’ve taken full advantage of retirement contributions, charitable donations, and prepaid expenses.
- Business structure: If your firm’s income has changed significantly this year, consider whether a change in entity structure—like moving to an S-corp—could save you taxes in 2025.
Pro Tip: A quick phone call or Zoom meeting with your CPA can still make a big difference in your tax situation—even on the last day of the year!
Why Last-Minute Tax Moves Matter for Lawyers
While it’s always better to plan throughout the year, the final hours of 2024 still offer critical opportunities to minimize your tax burden. By making final contributions to retirement accounts, prepaying expenses, deferring income, and ensuring all charitable contributions are completed, you can take control of your tax strategy—right up until the last minute.
Don’t wait until it’s too late. With these last-minute tax strategies, you can finish 2024 strong and start 2025 with your finances in order.
It’s Not Too Late—Schedule a Consultation for Last-Minute Tax Savings!
At Prestige Accounting and Consulting, we specialize in helping lawyers make the most of last-minute tax opportunities. If you’re looking to maximize deductions, defer income, or prepay expenses, our team is here to help you navigate your tax decisions—no matter how close to the deadline.
Contact us today to schedule a consultation and ensure you’re fully prepared before 2024 comes to a close.
