In its essence, this piece cautions real estate investors not to be obsessed with closing deals at the last quarter of the year but instead should reflect on the best tax tips. You see, there are ways you can minimize your taxes to levels that you wouldn’t mind paying and in this way, invest the remaining money towards your portfolio. Below are the most important activities that need to be undertaken before the end of December-mainly tax strategies.

1. Maximise the usage of the Section 199A Qualified Business Income (QBI) Deduction

If you use your LLC, S-Corp or are a sole proprietor and use your real estate investment for business, you can deduct QBI. This is actually an allowed subtraction of up to 20 per cent on your gross income based on your taxable income. You should seek advise from an accountant on whether you are eligible and how best to seize this window.

2. Other prepay expenses include:.

A quite obvious, yet widely used tool is the so called pay-in-advance strategy, under which utilities, taxes or repairs, insurance and maintenance costs might be paid beforehand. These expenses are usually deductible on the tax returns you file for the previous year and by making them in the last quarter they lower your taxable income. This is particularly helpful if you filed for a particular year with high income and would wish to balance this with deductions.

3. There’s Only One Catch for Maximizing Your Health Savings Account (HSA) Contributions

They argued that where one is on a high-deductible health plan (HDHP), it is wise to contribute to an HSA in order to reduce the taxable income. HSAs offer triple tax benefits: Donations are tax exempted, little earnings are also tax free and withdrawals for purposes of medical bills are also tax free. For the year 2024, limitations to contributions shall be $4,150 for an individual, and $8,300 for the family an additional of $1,000 for those that have touched their 55 years.

4. You can always delay some capital gains taxes by doing a 1031 Exchange with property or other investment.

For those who are selling a property this year, a 1031 exchange will enable one avoid paying capital gains taxes if they use the money from the property sale to buy another property. Selling your realized losses also enables you to escape a massive tax amount on your profits, besides retaining capital in other investments. In order to take advantage of it you have to find a replacement property within 45 days of the relinquishment and have closed the transaction within 180 days of such relinquishment.

5. Be sure to cut Capite losses to equal the gains of Harvest partners.

In case some of the investments brought below par returns in the current year, you can realize losses that you can later use to offset gains in other investment categories. This strategy lowers your overall taxable income hence gaining more advantage. For instance, selling a property at a loss, say $200,000 erases any proof of gains from another investment (sale of shares, for instance) and thus no taxable gain. When your losses are more than your gains, you can reduce up to $3,000 of ordinary income and transfer forward all the remaining losses.

6. Mining the Most out of Flexible Spending Account or FSA

FSAs is a program that enables you to contribute to pretax dollars to be used to pay certain expenses. Medical FSAs are $3,200 in 2024, whereas dependent care FSAs can be up to $5,000 or $2,500 if married filing separately. Remember that unlike an HSA, any available FSA funds which are not spent will be lost, unless your plan allows for a grace period to spend left-over funds or a permissible rollover of funds to the next year. Check your FSA balances and decide on how you’d want to spend the rest of the money before the year ends.

7. Take Maximum Benefit of Bonus Depreciation on New Acquires

Bonus depreciation enables investors to claim a huge percentage of the price of specific assets in the initial year the assets were put to use. This can be seen in equipment, appliances, or certain kinds of properties whether real estate, industrial or otherwise. This is true if you have made any of the bonus depreciation qualifying purchases this year; it can greatly reduce your taxed income.

8. Often people make contributions to charity not for the benevolence of the recipients, but for the tax benefits that come with giving to charity.

One should contribute to charities before the year ends since it can help lower tax revenue. Donations can be made in cash or some other property like stocks, real estate etc., and the donor gets a write off to the fair market value of the contribution. Altruism is not only a way to help many great causes but also helps with minimizing your taxes.

9. The following should be done to enhance retirement income: Contribute to a Retirement Account (IRA or Roth IRA, etc.)

Throwing money into a retirement account is one of the most recommended ways of lowering taxable income. For 2024, you can deduct no more than $6,500 a year for an IRA contribution ($7,500 a year if you’re 50 or older). Traditional IRA contributions are made with tax-deductible dollars, but withdrawals are not allowed until retirement is reached. Contrarily, you can contribute to Roth IRA, where you are not charged on withdrawal provided you’re above 59 years and a US resident for over 5 years; but the contribution is not tax-deductible.

10. Real Estate Professional Status is a special property ownership status which you need to grasp so as to maximize its potential in the sale of your property.

If one has to be categorized as a real estate professional then one can offset real estate losses against ones ordinary income. To qualify, you must engage the management of the real estate business for more than 750 hours in a year directly participating in real estate activities and at least 50% of your working time during the period. This is as a result of tax benefits that accrue to the investor as a result of this status when they fulfill the required conditions.

11. Move Income to Low Income Family Member

If you are filing jointly, with family members in lower tax brackets, you should consider tax-gain income shifting. We have one third, where children are allowed to earn $14,000 without paying federal income tax in the year 2024. Spouses and other relatives can be employed to do paperwork or perform upkeep of properties needed for business: by applying this technique you will be able to reduce your taxable earnings and enjoy convenient business expenses on the same time.

12. Know more about Tax Credits for Energy-Efficient improvements

Some changes that a landlord has carried out on the property, for instance putting solar panels or energy-saving appliances could attract tax credits. These credits can actually offset some of your taxes and make your properties greener in the process at the same time.

13. Review Potential Tax Credits

Some tax credit can be used to straightly offset the taxes owed by you. For instance, the Child Tax Credit, Saver’s Credit, and American Opportunity Tax Credit will likely affect you, based on your eligibility. Furthermore there are more selective credits for instance the Residential Energy Credit or the Electric Vehicle Credit if you availed the products or services this year you would be able to have a large amount of savings.

14. Seize Chance of Opportunity Zone Investment

Investing in Opportunity Zones allow for the possibility of paid taxes on those gains to be reduced or even eliminated. An opportunity zone is a geographical region recognized by the IRC that can spur massive incentives as regards taxes. If you’ve made or are thinking of making investments in these areas, you could cut a sizeable tax bill.

Conclusion

If you start being more proactive on your taxes right before the end of the year, then you will be able to lower your tax for the fiscal year 2024 plus have a better financial life. Whether through decisions made by both individuals and corporations or by utilizing money-saving strategies such as how accelerating depreciation and making as many contributions to retirement accounts as possible, how harvesting capital losses and capital credits, there are many ways to keep more of your money. Go through them with your accountant and make sure that you do not miss any opportunity to minimize the taxes you pay and maximize the money you want to make.