Year-End Tax Prep for Attorneys: Maximize Your Deductions Before December 31st

As we approach the end of the year, attorneys like you are likely juggling client work, case preparation, and maybe even some well-deserved holiday plans. But before you fully settle into the holiday spirit, there’s one more thing you should focus on: your taxes. Proper year-end tax prep can help you minimize your tax burden, maximize your deductions, and set you up for a successful financial start to the new year.

Whether you’re a solo practitioner or part of a larger firm, there are several strategies you can implement now to ensure you’re getting the most out of your deductions before the December 31st deadline.

1. Review Your Business Expenses

First things first—review your business expenses for the year. By doing a quick audit of your expenses, you can identify any deductible costs you may have overlooked. Common deductible expenses for attorneys include:

Continuing Legal Education (CLE): If you’ve attended CLE courses this year, those fees are fully deductible as professional development.
Office Supplies: Did you buy any office supplies or upgrade your technology? Whether it’s pens and paper or a new laptop, office supplies are deductible.
Marketing Costs: Paid for online advertising, a website revamp, or networking events? These marketing expenses can be written off.
Travel for Business: If you traveled for client meetings or attended a conference, travel-related expenses such as airfare, hotel stays, and meals may also be deductible.

By keeping detailed records of these expenses, you can ensure you’re not missing out on any deductions. If you don’t have a system in place for tracking expenses, now is the time to implement one—consider using accounting software to automate the process going forward.

2. Defer or Accelerate Income and Expenses

One of the key ways attorneys can manage their taxable income is through timing. Depending on your financial situation this year, you may want to consider deferring or accelerating income or expenses.

Deferring Income: If it looks like your income will be higher than usual this year and push you into a higher tax bracket, you may want to defer income to next year. This can be done by delaying sending invoices until after January 1st or by negotiating with clients to receive payments in early 2025 rather than late 2024.
Accelerating Expenses: On the flip side, if you anticipate your income being lower next year, it may make sense to accelerate expenses now to take full advantage of deductions. For example, if you know you’ll need new office equipment or plan to sign up for a conference, consider making those purchases before December 31st to deduct them from this year’s taxes.

Discuss your specific situation with a tax professional to determine whether deferring or accelerating income and expenses is the best approach for you.

3. Max Out Retirement Contributions

One of the smartest ways to reduce your taxable income is by contributing to a retirement plan. As an attorney, you likely have access to several retirement options, including a SEP IRA, a SIMPLE IRA, or a solo 401(k) if you’re self-employed.

Here’s a quick breakdown of contribution limits:

SEP IRA: For 2024, you can contribute up to 25% of your net earnings, with a maximum contribution of $66,000. Contributions made to a SEP IRA are tax-deductible, so this can significantly lower your taxable income.
SIMPLE IRA: The contribution limit for a SIMPLE IRA in 2024 is $17,000, with an additional $3,000 catch-up contribution for those aged 50 and older. Like the SEP IRA, contributions to a SIMPLE IRA are tax-deductible.
Solo 401(k): If you’re a solo practitioner, a solo 401(k) offers even higher contribution limits—up to $23,000 as an employee contribution, plus up to 25% of your net earnings as an employer contribution. That’s a significant tax-saving opportunity.

By maxing out your retirement contributions, you’re not only preparing for your future but also reducing your tax burden today.

4. Deduct Home Office Expenses

If you’re one of the many attorneys who work from home at least part-time, don’t forget to take advantage of the home office deduction. If your home office is used exclusively for business, you can deduct a portion of your rent or mortgage, utilities, and even home repairs.

There are two ways to calculate the home office deduction:

Simplified Method: You can deduct $5 per square foot of your home office, up to a maximum of 300 square feet (or $1,500).
Actual Expense Method: Alternatively, you can deduct a portion of your actual home-related expenses, based on the percentage of your home’s square footage that is used for business. This method requires more detailed record-keeping but could result in a larger deduction.

Even if you only work from home part-time, it’s worth exploring whether the home office deduction applies to you.

5. Make Charitable Contributions

The holiday season is a popular time for charitable giving, and these donations can also provide a tax benefit. If you make charitable contributions before December 31st, you may be able to deduct the value of your donations on your taxes.

Keep in mind that charitable donations must be made to qualified organizations, and you’ll need to keep receipts for any donations over $250. Additionally, if you donate property or other non-cash items, you may need to provide an appraisal to determine the value of the donation.

By supporting a cause you care about, you can also lower your tax liability—a win-win!

6. Consider Hiring a Professional Bookkeeper or Accountant

The tax laws for attorneys can be complex, especially when it comes to determining what expenses are deductible and how to best manage your income. If you’re unsure about where to start or if you’re worried about missing deductions, it may be time to bring in a professional bookkeeper or accountant.

A qualified accountant can help you:

Organize your financial records so you’re fully prepared for tax season.
Identify additional deductions you may have missed.
Ensure compliance with all IRS regulations to avoid costly penalties.

Don’t wait until the last minute to get your finances in order. Hiring a professional can save you time, stress, and money in the long run.

Let Us Help You Maximize Your Deductions!

As an attorney, your time is valuable, and tax preparation may not always be at the top of your to-do list. Let us take the stress out of year-end tax prep and ensure you’re maximizing your deductions.

At Neovision, we specialize in helping attorneys like you with bookkeeping and taxes. Whether you need help organizing your expenses, optimizing your retirement contributions, or preparing for the upcoming tax season, we’re here to make the process as smooth and straightforward as possible.

By implementing these strategies now, you’ll not only reduce your tax liability for 2024 but also enter the new year with a clearer financial picture. Taking the time to prepare for year-end taxes doesn’t have to be overwhelming—especially when you have the right support.

Let’s get started!