Last-Minute Tax Deductions: Retirement Contributions, Bookkeeping, Home Office, Vehicles, and Food & Entertainment

Time is running out to trim your tax bill. Whether you’re an individual taxpayer or a small business owner, there are still a few last-minute moves you can make to maximize deductions before the tax deadline hits. In this guide, we’ll break down five key areas to focus on: retirement contributions, bookkeeping clean-up, home office deductions, vehicle expenses, and meals & entertainment. These strategies come with practical examples and urgent tips to help you squeeze in any remaining tax savings legally and efficiently. (As always, remember that individual circumstances vary – consider consulting a tax professional to ensure these tips apply to you.)

Maximize Retirement Contributions (IRAs, 401(k)s, SEP IRAs)

One of the easiest last-minute deductions is contributing to a retirement account. Why? Because certain retirement contributions are tax-deductible, and some can be made right up until the tax filing deadline. For individual taxpayers, this usually means Traditional IRA contributions. For small business owners or self-employed folks, it could include SEP IRAs or solo 401(k) contributions. Here’s how to make the most of these opportunities:

• Contribute to an IRA – If you haven’t maxed out your IRA for the previous tax year, now is the time. You can contribute to a traditional IRA until the April tax filing deadline and have it count for last year’s deduction. For example, for the 2024 tax year the IRS lets you contribute up to $7,000 (or $8,000 if you’re over 50) to an IRA. If you make a full $7,000 contribution and you’re in the 22% tax bracket, you could save about $1,540 in federal taxes ($7,000 x 22%). That’s a significant last-minute savings while also boosting your retirement nest egg. (Note: Income limits apply for deducting IRA contributions if you or your spouse are covered by a workplace retirement plan, so check the IRS rules or ask your advisor.)

  
  

• Tweak your 401(k) Contributions – If you’re an employee with a 401(k) and it’s late in the year, see if you can increase your final contributions through your payroll. Every additional dollar you contribute to a traditional 401(k) is pre-tax, which lowers your taxable income. While these contributions generally must be made by December 31 (since they come from your paycheck), many people forget they can make a last payroll push. For instance, if it’s December and you get a year-end bonus, you might defer more of that into your 401(k) if your plan allows. This not only saves taxes now but also puts more money away for retirement.

  
  

• Leverage Self-Employed Retirement Plans – Small business owners have additional options, like SEP IRAs and solo 401(k)s, which allow larger contributions. The great part is you can often set up and fund a SEP IRA up to the tax filing deadline (even on extension) and still deduct it for last year. A SEP IRA lets you contribute up to 25% of your net self-employment income (profit), capping out at a high dollar limit. For example, the contribution limit for the 2024 tax year is $69,000, and for 2025 it's $70,000. Example: Susan is a freelance consultant who earned $100,000 in profit. In March, while preparing her taxes, she opens a SEP IRA and contributes $20,000. This potentially knocks her taxable income down to $80,000 – saving her thousands in taxes, all for money deposited after the year ended. (Remember, to count for 2024 taxes, she must designate it as a 2024 SEP contribution and make it by the deadline.) Solo 401(k)s have similarly generous limits, though new plans generally need to be established by year-end. The key point is, it’s not too late to act on retirement contributions, even if the calendar year is over – so take advantage of every dollar of deduction you can squeeze in!

  
  

(Compliance note: Ensure you qualify for the retirement contribution and deduction you’re taking – the IRS has specific rules on income limits, plan participation, and timing. For instance, Roth IRA contributions won’t give an immediate deduction (they’re after-tax), and traditional IRA deductions phase out at higher incomes. Always double-check the current IRS guidelines or consult a professional.)

Catch Up on Bookkeeping to Find Missed Deductions

Small businesses and individuals alike can lose out on deductions simply by failing to record or categorize expenses properly. As the tax deadline looms, it’s critical to clean up your books and receipts. Think of it as a last-minute treasure hunt for tax write-offs hiding in plain sight. Here’s how to get your records in order and uncover savings:

• Review All Expenses for the Year: Go through your bank statements, credit card statements, and accounting software to identify any business or deductible expenses you paid but didn’t record or categorize correctly. It’s easy to overlook a receipt from last spring or forget that online subscription you started. By combing through transactions now, you might find legitimate deductions that increase your total write-offs (and thus reduce taxable income). For example, if you discover $500 worth of office supplies or work-related travel receipts you missed, that’s $500 more in deductions – which could save, say, $100+ in taxes if you’re in a 20% bracket.

  
  

• Reconcile and Organize: Make sure your books are reconciled – that means your recorded income and expenses match what actually went through your accounts. Cleaning up any discrepancies now will prevent mistakes on your tax return. Also, organize your supporting documents. The IRS can disallow expenses that aren’t backed up by receipts or records, so ensure you have documentation for major expenses like equipment purchases, vehicle mileage logs, home office calculations, etc. If you’re missing a receipt, see if you can get a copy or at least note the details (date, amount, business purpose).

  
  

• Look for Last-Minute Expense Opportunities: If you’re a cash-basis taxpayer (which most individuals and many small businesses are), you only deduct expenses in the year you actually paid them. That means if it’s not yet December 31 (for year-end planning), you could accelerate some expenses into this year to boost your deductions. For example, you might pay a January bill in December, stock up on office supplies now, or make an extra mortgage payment on December 31 if you itemize and can deduct mortgage interest. Small businesses might consider purchasing needed equipment or software now rather than waiting. "Making major business-related purchases at the end of the year" and even "prepaying expenses" are valid strategies to reduce the current year’s taxable income. Example: Mike, who runs a small design firm, decides in late December to buy that new laptop for $1,500 and prepay his office rent for January ($1,000) – expenses he’d have in the new year anyway. By doing it on December 31, he increases his 2024 deductions by $2,500, directly lowering his taxable profit for 2024.

  
  

(Compliance note: Only claim expenses that are truly business-related or legitimately deductible under IRS rules. Personal expenses are never deductible as business costs. If an expense was partly personal and partly business (like your cell phone, vehicle, or home internet), make sure you only deduct the business-use portion. Reasonable allocation and documentation are key. When in doubt, ask your CPA how to handle mixed-use expenses to stay on the right side of the law.)

Claim the Home Office Deduction if You Qualify

For many entrepreneurs and freelancers, the home office deduction can be a significant tax saver – yet it’s often misunderstood or overlooked. If you work from home, even part of the time, you should determine if you qualify for this deduction before filing your taxes. This is especially relevant for sole proprietors, independent contractors, or small-business owners operating from a home base. Here’s what you need to know (and do) at the last minute:

• Ensure You Meet the Requirements: The home office deduction isn’t available to everyone. You must use part of your home exclusively and regularly for business purposes to claim it. “Exclusive use” means that your work area can’t double as a family den or a guest bedroom on the weekends – it needs to be a dedicated space (a separate room or clearly delineated area) that’s used only for your trade or business. “Regular use” implies you use this home workspace on a continuous, ongoing basis (not just once a month). If you only occasionally work from the kitchen table, that won’t count. Importantly, under current tax law, employees (W-2 workers) generally cannot take a home office deduction on their federal return. The Tax Cuts and Jobs Act suspended unreimbursed employee expense deductions (including home office) through at least 2025. So this deduction is mainly for self-employed individuals and business owners. If you’re self-employed and meet the criteria, don’t be afraid to take the deduction – it’s completely legal and not automatically a red flag if done correctly.

  
  

• Choose a Calculation Method: If you do qualify, you have two ways to calculate your home office write-off: the simplified method or the actual expense method. The simplified method is straightforward – you deduct $5 per square foot of your home office space, up to a maximum of 300 square feet. So if you have a small 150 sq. ft. office, that’s a $750 deduction (150 x $5). The regular method involves calculating the percentage of your home devoted to business and then applying that percentage to eligible home expenses (like rent or mortgage interest, utilities, homeowners insurance, property taxes, repairs, etc.). For example, if your home office is 10% of the square footage of your house, you could deduct 10% of those bills – potentially yielding a larger deduction than the simplified method, especially if you have high housing costs. The trade-off is that the actual method requires more record-keeping and you’ll need to account for things like depreciation of your home. Tip: If you haven’t kept detailed records of your home expenses, the safe harbor $5/sq ft might be the easier last-minute route. On the other hand, if you paid a lot in rent or utilities and can substantiate it, taking the percentage-based approach could save you more. You can calculate it both ways to see which is better.

  
  

• Document Your Space and Usage: Before you file, make sure to document your home office in case you ever need to defend it. This could be as simple as snapping a photo of the space to show it’s a clearly separate area used for work, and keeping a sketch or notes of the room’s dimensions (to prove square footage). Also keep copies of bills (electricity, water, etc.) if you’re using the actual method. If you just started using a home office in the last year, note when you began – the deduction typically applies from that start date. Important: If you use the actual expense method, you cannot also deduct those same expenses elsewhere. For example, don’t deduct your full internet or utility bills as business expenses in addition to including them in the home office calc – that would be double dipping. Only the apportioned part counts.

  
  

(Compliance note: The home office deduction has specific rules – make sure you follow them closely. If your situation is borderline, err on the side of caution or get professional advice. Remember that for homeowners, using the actual method means you have to account for depreciation on the portion of the home used for business, and any depreciation taken may need to be “recaptured” (taxed) if you sell the house later. If that’s more complexity than you want, the simplified method avoids depreciation altogether. Also, if you had a home office and no longer qualify (or vice versa) – for instance, you went from self-employed to employee mid-year – you need to prorate appropriately. When in doubt, consult IRS Publication 587 or a tax advisor to ensure you’re calculating this deduction correctly and legally.)

Leverage Vehicle Expenses and Purchases

Do you drive your personal car for business errands or have a vehicle owned by your business? If so, don’t overlook the vehicle expense deduction in your last-minute tax review. Vehicle costs can be a substantial write-off for small businesses, and even for side-giggers or employees who have unreimbursed business mileage (though note: standard employees can no longer deduct unreimbursed mileage on federal returns due to tax law changes). Here’s how individuals and business owners can maximize deductions related to cars and trucks:

• Deduct Mileage or Actual Expenses: The IRS offers two methods to write off business use of a vehicle – the standard mileage rate or actual expenses. You choose whichever gives you a bigger deduction (but if it’s the first year using the vehicle for business, you must choose mileage in that first year if you ever want to use it, otherwise you’re locked into actual method for that car). For most people scrambling at tax time, the standard mileage deduction is simpler: just multiply your business miles for the year by the IRS mileage rate. For tax year 2024, the rate is $0.67 per mile. For example, if you put 5,000 miles on your car for work in 2024, that’s a $3,350 deduction off your taxable income. Not bad for something you might have otherwise overlooked! The key is you must have records of your business mileage – ideally a mileage log or tracking app that notes the date, miles, and business purpose of each trip. If you haven’t logged every trip, try to reconstruct it from calendars or client records, and be sure to note your odometer reading as of Dec 31 (or Jan 1) for an ending mileage figure. Alternatively, the actual expense method lets you deduct a proportion of your actual vehicle costs (gas, repairs, insurance, maintenance, depreciation, etc.) equal to the business-use percentage. Unless you have kept all receipts and can tally up those costs, it might be tough to do last-minute. But if, say, you had major auto repairs that make actual expenses more valuable, it could be worth the effort. Tip: Choose one method per vehicle and run the numbers. Many folks find the mileage rate is generous enough, but high-cost vehicles or heavy use might yield bigger deductions with actual expenses. Don’t forget to include tolls and parking fees for business trips – those can be added on top of the standard mileage allowance.

  
  

• Year-End Vehicle Purchase (Section 179 Bonus): If you’ve been eyeing a new (or new-to-you) vehicle for your business and you have the cash or financing in place, a last-minute purchase before year-end could score a large deduction. Under Section 179, businesses can elect to immediately expense the cost of qualifying business property, including vehicles, rather than depreciating over years. The deduction limits are pretty high – for 2024, you can expense up to $1.22 million of eligible business equipment purchases (plenty for a fleet of vehicles, if you wanted!). Even passenger vehicles have favorable treatment: thanks to bonus depreciation rules in recent years, a new car used 100% for business could allow a first-year depreciation deduction of up to $20,400. Larger heavy SUVs, trucks, or vans (with gross weight over 6,000 lbs) can often be fully deducted in the year of purchase, because they’re not subject to the passenger auto “luxury car” caps (though a special rule limits Section 179 on certain SUVs to around $30,500 for 2024). The practical upshot: If your business needs a vehicle or equipment, buying it before December 31 means you can take the write-off now rather than next year. Example: Lisa is a realtor who needs a reliable vehicle for client meetings and property visits. On December 28th, 2024, she purchases a new SUV for $50,000 and puts it in service for her business. Because it’s over 6,000 lbs GVW, she elects Section 179 and immediately writes off $30,500 of the cost (the maximum for SUVs that year) and then uses bonus depreciation on the rest, resulting in maybe a ~$40,000 first-year deduction. This dramatically lowers her taxable income for 2024, potentially saving her tens of thousands in taxes. (Of course, she’ll have to actually use the vehicle predominantly for business to justify that deduction.) If you go this route, make sure the vehicle is placed in service by year-end – meaning you’ve taken possession and it’s ready for use in your business, not just on order.

  
  

• Don’t Forget Ongoing Vehicle Expenses: Even if you didn’t buy a new car, you can still deduct the costs of using your current vehicle for work. Ensure you’ve accounted for all business mileage throughout the year (deliveries, client meetings, travel between job sites – but not your commute to a regular office). Also include related expenses: business-related parking fees, tolls, and even a portion of auto loan interest if you’re self-employed (interest is deductible on Schedule C for business owners). If you use actual expenses, gather receipts for gas, oil changes, registration, insurance, etc., and figure out the percentage that was business. And if you leased a car for business, you can deduct the business-use percentage of lease payments (with some luxury auto adjustments).

  
  

(Compliance notes: Vehicle deductions are an area the IRS scrutinizes, so be diligent. Personal commuting miles are never deductible – driving from home to your main office or job site is considered personal commuting. Only miles driven for business purposes (beyond your regular commute) count. Keep a contemporaneous log if possible, or at least record the total business miles versus total miles for the year to establish your business use percentage. And remember, if you use Section 179 or bonus depreciation on a vehicle and then your business use drops in later years (below 50%), you may have to recapture some of that depreciation. In short, use these incentives for genuine business needs, not just for a tax break. When used correctly, they’re a powerful last-minute tax tool – but always follow the rules and keep proof of business use.)

Deduct Meals (Food) and Navigate the Entertainment Rules

Food and entertainment expenses are a tricky area of tax deductions – some are partially deductible, some are 100%, and some not at all. In the final stretch of tax prep, it’s worth reviewing any work-related meal or entertainment costs you incurred to ensure you deduct what you’re allowed (and not more). The rules changed a bit in recent years, so let’s clarify what you can do last-minute in this category:

• Business Meals are 50% Deductible (Generally): In most cases, you can deduct half of qualifying business meal expenses. This includes meals with clients, customers, or colleagues for a business purpose (for example, discussing a project over lunch or taking a client to dinner to build rapport). You must have a record of the expense (receipt) and note the business purpose and who was present. As long as the meal isn’t lavish or extravagant, 50% of the cost is deductible. Example: You spent $200 taking a potential client to a nice restaurant. Assuming the discussion was primarily business-related and you documented it, you can deduct $100 on your tax return for that meal. Year-end tip: If you have meals that you forgot to categorize as business, gather those receipts now. Maybe you had a couple of coffee meetings or grabbed takeout during a business trip – it adds up. Note that for 2021 and 2022 tax years, there was a temporary 100% deduction for restaurant meals (to help restaurants during COVID), but that has expired – for 2023 and 2024, we are back to the normal 50% limit. So don’t accidentally deduct the full amount unless it qualifies for a special exception.

  
  

• Entertainment Expenses are Non-Deductible: It’s important to know that most pure entertainment expenses – like sports tickets, concerts, golf games with clients, club memberships – cannot be deducted at all per current IRS rules. The law changed in 2018 (Tax Cuts and Jobs Act), eliminating the old deduction for entertainment, even if it was business-related. However, if you had an outing that included both entertainment and food, you can still deduct the meals portion (50%) if the receipt or invoice separately states the cost of food from the entertainment cost. For instance, if you took a client to a ballgame (ticket $150) and bought $50 of hot dogs and drinks during the game, the $150 for tickets is not deductible, but you could deduct $25 for the food (half of $50) – provided you have an itemized receipt or reasonable allocation. If the food isn’t separately priced, then none of it is deductible in an entertainment setting. So, as you finalize your records, do not count pure entertainment costs as write-offs. It’s a common mistake to think client entertainment is a tax break – unfortunately, no, not under current law.

  
  

• Client and Employee Entertainment Exceptions: While you generally can’t deduct entertainment, there are a few exceptions you should know, especially for last-minute planning. One great exception is recreational or social events for employees. Money you spend on things like the company holiday party, annual picnic, or team-building outings for employees is 100% deductible (and also not taxable to the employees as long as it’s primarily for their benefit). So if you haven’t shown appreciation to your team yet, you could throw a year-end Zoom party with delivered lunches, or an in-person dinner, and deduct the full cost. Even if you’re a sole proprietor with just family helping, a modest year-end meal for the “team” might qualify (just be sure it’s actually a business celebration). Another exception: if you travel for business or attend a conference, your meals while traveling are subject to the 50% limit, but things like the conference fee or event ticket (if it’s a business conference) are fully deductible as education or marketing expense, not entertainment. The IRS also allows full deduction for meals provided to the public (e.g., at a promotional event) or meals you include as taxable compensation to an employee. These are niche cases, but worth mentioning if they apply to you.

  
  

• Keep Good Records and Be Reasonable: For any meal expense, especially those near year-end which might be questioned, keep the receipt and note the “who, where, when, and why.” For example: “Dec 20 – Dinner with Jane Doe (ABC Corp) at Italian Bistro – discussed project proposal for Q1. $150.” This kind of note will satisfy auditors that it was a legitimate business meal. Also, ensure the expense is not excessive. The IRS won’t allow deductions for lavish or extravagant meals if they’re beyond a reasonable standard. A $300 ordinary client dinner might be fine; a $3,000 super-luxe experience might raise eyebrows unless you have a very good reason. Given we’re talking last-minute actions: if you want to increase your meal deductions, you could consider scheduling a legitimate business lunch or dinner meeting before the year ends. Do you have a prospect you’ve been meaning to catch up with? Or an informal team meeting over lunch? Doing it now (and footing the bill) can both solidify your business relationship and give you a deduction (50% of it). Just don’t go overboard purely for a write-off – remember, you’re still spending cash to get a fraction back in tax savings.

  
  

(Compliance note: Always follow IRS guidelines for meals and entertainment. To summarize the rules: Meals are 50% deductible if they are ordinary, necessary, not lavish, and you (or an employee) are present and discussing business. Entertainment is not deductible (0%) in almost all cases. Employee parties or occasional team meals are 100% deductible as de minimis or recreational benefits. And you cannot circumvent the entertainment disallowance by overpaying for food – the cost must be separately stated and reasonable. As you claim these deductions, double-check current IRS rules or have your accountant review if you’re unsure. Proper documentation is your best defense if questioned.)

Conclusion: Act Now and Save – Don’t Leave Money on the Table

As the clock ticks down on tax season, urgency is key. The strategies above – from stashing a bit more into your retirement accounts to making sure you’ve captured every possible write-off – can collectively save you a significant amount in taxes. These are last-minute tactics, but they are rooted in sound tax planning principles: defer income, accelerate deductions, document everything, and use the incentives the law provides. If you’re feeling overwhelmed, prioritize the areas that apply most to you. For an individual, that might be double-checking IRA contributions and deductible expenses like a home office or charitable contributions. For a small business owner, it might be reviewing your financial statements for missed expenses, deciding on any final asset purchases, and ensuring you’ve got your home office and vehicle logs in order.

Remember, every deduction is dollars back in your pocket. A $1,000 deduction could save you $200 or $300 in actual tax, depending on your bracket. Multiply that by a dozen little moves, and we could be talking real money. But after the tax year or filing deadline passes, those opportunities vanish – so it’s truly “use it or lose it.” Don’t be the person slapping their forehead on April 16th saying, “I wish I had…”.

If you need help executing any of these last-minute strategies or want reassurance that you’re doing it right, Brister Law Firm is here to assist. We specialize in helping individuals and business owners navigate tax rules and legally minimize their liabilities. It’s not about fancy loopholes or gimmicks – it’s about being thorough and proactive, even at the eleventh hour.

Call to action: If you have questions or could use a professional eye on your tax situation, don’t hesitate to reach out. Our team can walk you through retirement plan options, review your bookkeeping, and ensure you’re compliant with deductions like home office and meals. The goal is to make sure you’re not overpaying on taxes because you missed something last-minute. Feel free to schedule a free discovery call with us – we’ll be happy to help you wrap up tax season with confidence.

Final note: This blog is for general informational purposes and not formal tax advice. Every taxpayer’s situation is unique. Be sure to consult with a qualified tax advisor or attorney (we’d be honored to help) to discuss how these strategies apply to your own circumstances.