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Accounting

Tax Strategy: 2024 year-end tax planning

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2 years ago

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As was the case in 2023, 2024 has so far not produced significant tax legislation impacting year-end tax planning. However, it continues to be impacted by tax legislation enacted in prior years, including the Tax Cuts and Jobs Act, SECURE 2.0, and the Inflation Reduction Act. Those pieces of legislation included deferred effective dates, some of which become effective in 2024, and/or sunset and phase-out dates that can also impact tax planning in 2024.

Inflation adjustments

Like every year, many of the dollar amounts associated with tax provisions are adjusted for inflation. As the inflation rate has declined over the last couple of years, the inflation adjustments for 2024 are somewhat smaller than they were for 2022 and 2023.

  • Tax brackets: The continued inflation adjustments to the tax brackets will result in reduced taxes on taxable incomes that are at the same level as in 2023.
  • Standard deduction: The significantly increased standard deduction from the Tax Cuts and Jobs Act continues to be adjusted for inflation for 2024 to $14,600 for single filers, $21,900 for head of household filers, and $29,200 for joint filers. This will continue to make the standard deduction more attractive to many taxpayers than itemizing deductions. This simplifies tax return preparation for taxpayers claiming the standard deduction, but may also affect taxpayer behavior since taxpayers claiming the standard deduction no longer get a tax benefit from activities such as charitable giving and home ownership.
  • Estate and gift tax unified credit: The significantly increased unified credit from the Tax Cuts and Jobs Act continues to be adjusted for inflation in 2024 to $13,610,000.
  • Retirement plans: Inflation adjustments for 2024 to retirement provisions include IRA contribution limits to $7,000 from $6,500, with the catch-up amount remaining $1,000. Limits for 401(k) plan contributions increased to $23,000 for 2024, with a limit of $30,500 for those age 50 and over.

Tax Cuts and Jobs Act

The individual provisions of the Tax Cuts and Jobs Act currently expire after 2025. They therefore remain effective for 2024 and 2025. However, some of the expiring provisions may warrant tax planning for 2024 and 2025. If the standard deduction is significantly reduced, taxpayers may consider taking steps to postpone charitable contributions until 2026 when itemized deductions are likely to be more beneficial.

A close up of the capital building with an American flag

Wealthier taxpayers facing a halving of the unified credit in 2026 may wish to consider gifts in 2024 and 2025 to reduce the taxable estate before 2026. The Supreme Court’s decision this year in Connelly holding that a contractual obligation to redeem a deceased shareholder’s shares at fair market value is not necessarily a liability that reduces the corporation’s value for federal estate tax purposes warrants a review, and perhaps restructuring of buy-sell agreements, with even the Supreme Court suggesting the use of cross-purchase agreements between shareholders.

Many of the business provisions of the Tax Cuts and Jobs Act were made permanent. A few, however, have already expired or are phasing out. These include the full expensing of research and experimental costs, the limits on deduction of business interest, and bonus depreciation. Congress has made efforts to restore these provisions in legislation that has passed the House but has so far failed to pass the Senate. Restoration of these provisions was tied to an increase in the Child Tax Credit. For 2024, therefore, these provisions remain in their phase-out status and have not yet been restored. The legislative proposals would have restored them retroactively; however, as time passes, it is not clear that retroactive restoration would be retained.

SECURE 2.0

SECURE 2.0 made many retirement-related changes to the Tax Code, with many phased in over a period of years, including 2024. It added several new provisions for penalty-free distributions from retirement accounts. In addition to terminal illnesses and qualified disasters effective for 2023, it also added, effective for 2024, penalty-free withdrawals up to $1,000 for emergency expenses and withdrawals of the lesser of $10,000 or 50% of the account value in cases of domestic abuse.

The law also added a provision for employer 401(k) matching of employee student loan payments, and made several enhancements to SIMPLE plans, several of which became effective for 2024. Effective 2024 and later, 529 plan beneficiaries can roll over an aggregate of $35,000 in excess funds to a Roth IRA, and starting in 2024, employers without a retirement plan are entitled to a tax break for starter 401(k) plans or 403(b) safe harbor plans.

The act had required beneficiaries of inherited IRAs who were not eligible designated beneficiaries such as spouses to take distributions within 10 years of the IRA owner’s death. The IRS later clarified that, if the IRA owner had started required minimum distributions before death, the beneficiary was required to take the distributions ratably over the 10-year period rather than at the end of the 10-year period. Since many taxpayers and tax practitioners had not anticipated the ratable distribution requirement, the IRS agreed to waive penalties for failure to make required minimum distributions in 2022 and 2023 and has now also waived penalties for failure to make required minimum distributions in 2024 for IRA owners who died in 2023.

Starting in 2024, required minimum distributions are no longer required from designated Roth accounts.

Inflation Reduction Act

Many of the provisions of the Inflation Reduction Act, enacted in 2022, have delayed effective dates. Provisions becoming effective for 2024 include:

  • Clean vehicle credit transfer: The rules for transfer to a dealer of the clean vehicle credit apply to vehicles placed in service after Dec. 31, 2023.
  • Zero-emission nuclear power: The new zero-emission nuclear power production credit applies to electricity produced and sold after Dec. 31, 2023.

Digital asset reporting

The expansion of broker reporting of digital asset transactions on Form 1099-B and the new Form 1099-DA has been proposed and delayed for several years. Currently, the reporting rules for Form 1099-DA do not apply until 2025 and the requirement for cost-basis reporting until 2026.

Third-party reporting

The requirement for third-party payment processor reporting has also been delayed for a few years. For 2024, reporting on Form 1099-K is required if the taxpayer receives $5,000 or more. Under current law, this is still scheduled to phase down to $600, although proposals have been made in Congress to increase the reporting limit.

Summary

In addition to these tax law changes effective for 2024, the usual tax planning strategies remain in effect. These include postponing income and accelerating deductions; bunching itemized deductions every other year and taking the standard deduction in the off year; year-end review of investments for possible offset of capital gains and losses; and maximizing charitable contributions and qualified retirement plan contributions. Proposals from the presidential candidates, even if some are eventually enacted, are not likely to have a direct impact on 2024 tax returns.

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Accounting

AI-Driven Automation and Continuous Accounting Frameworks

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1 week ago

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August 15, 2026

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The accounting profession is undergoing a fundamental structural transition as enterprise finance departments shift from periodic month-end closes toward automated continuous accounting models. By integrating specialized machine learning algorithms directly into enterprise resource planning (ERP) platforms, chief accounting officers are transforming financial reporting from a retrospective exercise into a real-time operational asset.

The Shift from Periodic Close to Continuous Financial Reporting
Traditional accounting workflows heavily relied on manual data reconciliation, spreadsheet calculations, and multi-week closing cycles at the end of each fiscal period. In contrast, continuous accounting frameworks utilize automated software agents to process, validate, and post transactional data in real time as business activities occur.

Automated bank reconciliation tools cross-reference incoming bank feeds, invoice records, and purchase orders automatically. By resolving transactional variances instantly throughout the month, corporate accounting teams eliminate the traditional workload spikes associated with quarterly and annual closes.

Machine Learning in Audit Trails and Anomaly Detection
Advanced natural language processing (NLP) and machine learning tools are redefining internal audit and financial control environments. Automated systems analyze 100% of general ledger entries, identifying anomalous transactions, duplicate payments, and unauthorized journal entries in real time.

Rather than relying on random statistical sampling, corporate internal auditors can focus their attention on high-risk flags automatically surfaced by algorithmic monitoring platforms. This continuous risk assessment strengthens internal controls over financial reporting (ICFR) and significantly reduces fraud risk.

Evolving Roles for Accounting Professionals
As routine data entry and manual reconciliation tasks become fully automated, the skill set required for accounting professionals is shifting toward data analysis, system design, and strategic business advisory.
– Systems Governance: Accountants are increasingly responsible for monitoring algorithmic accuracy and managing data integration pipelines.
– Business Partnership: Finance professionals leverage real-time financial dashboards to advise operational leaders on margin management and working capital allocation.
– Regulatory Compliance Management: Accounting teams utilize automated platforms to ensure compliance with dynamic tax codes and international accounting standards.

Core Implementation Recommendations
1. Deploy Automated Reconciliation Tools: Integrate continuous transaction processing modules into existing enterprise ERP architectures.
2. Establish Algorithmic Governance Controls: Implement strict internal testing protocols to ensure automated accounting rules comply with GAAP/IFRS standards.
3. Reskill Accounting Teams: Invest in training finance staff on data analytics, workflow automation, and predictive financial modeling.

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Accounting

Global ESG Reporting Standards and Double Materiality Compliance

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2 weeks ago

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August 9, 2026

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Corporate accounting departments face expanding reporting expectations as international sustainability disclosure standards achieve regulatory enforcement across major global jurisdictions. Chief Accounting Officers (CAOs) and corporate controllers are establishing rigorous internal accounting controls to treat Environmental, Social, and Governance (ESG) metrics with the same data precision, auditability, and governance as traditional financial statements.

Regulatory Harmonization Under Global Sustainability Frameworks
The implementation of standardized sustainability reporting frameworks—notably rules established by international sustainability accounting boards—has created unified expectations for public and large private enterprises. Corporations must report standardized metrics covering greenhouse gas emissions (Scope 1, 2, and material Scope 3), energy utilization, workforce demographics, and supply chain governance.

In Europe and other participating international jurisdictions, double materiality principles are mandatory. Under double materiality, organizations must report both how external sustainability risks impact corporate financial performance, and how internal corporate operations affect surrounding environmental and social structures.

Integrating Sustainability Metrics into Core ERP Systems
To provide auditable non-financial data, enterprise organizations are integrating specialized carbon accounting and ESG management platforms directly into core ERP systems. Automated data collectors capture energy utility invoices, logistics fuel consumption metrics, and vendor compliance records in real time.

Establishing automated, traceable data pipelines ensures that non-financial reporting is supported by clear audit trails. This structured approach allows external financial auditors to provide reasonable assurance on sustainability disclosures during annual corporate reporting cycles.

Financial Impacts and Capital Market Disclosure
Accurate ESG reporting directly influences corporate cost of capital and institutional credit ratings. Commercial lenders and institutional asset managers systematically incorporate sustainability metrics into risk pricing models. Companies that demonstrate transparent, verifiable progress in operational energy efficiency and climate risk mitigation benefit from expanded access to green bond markets and lower debt pricing.

Action Steps for Accounting Leadership
1. Implement Double Materiality Frameworks: Conduct comprehensive assessments to identify material financial and operational sustainability metrics.
2. Build Auditable Non-Financial Data Pipelines: Automate ESG data collection within core accounting software to ensure data integrity.
3. Align Sustainability with Annual Financial Filings: Prepare non-financial disclosures concurrently with financial statements to satisfy regulatory audit expectations.

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Accounting

Modernizing Internal Controls: Machine Learning and Continuous Monitoring in Auditing

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3 weeks ago

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August 5, 2026

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Internal audit departments and corporate risk managers are modernizing internal control frameworks by shifting from periodic sampling techniques to continuous monitoring and machine learning analytics. As operational data volumes increase across enterprise organizations, automated control testing ensures financial integrity, prevents corporate fraud, and streamlines annual audit engagements.

The Limitation of Periodic Audit Sampling
Historically, internal and external auditors evaluated internal controls by reviewing random samples of financial transactions—often analyzing less than five percent of total ledger entries. In complex enterprise environments, periodic sampling methods carry inherent risks of overlooking localized financial misstatements, unauthorized disbursements, or operational control breakdowns.

In 2026, progressive internal audit functions are utilizing automated continuous monitoring platforms that evaluate one hundred percent of financial transactions in real time. Continuous control auditing systems continuously monitor general ledger entries, procurement approvals, and expense reimbursements across all operating subsidiaries.

AI-Powered Fraud Detection and Anomaly Identification
Machine learning models trained on historical corporate financial data excel at identifying subtle transactional anomalies that indicate potential fraud or operational error. Automated systems instantly flag duplicate invoice payments, unapproved vendor creation, unusual journal entry timing, and unauthorized override of authority thresholds.

When an anomaly is detected, the automated auditing platform generates an instant risk alert, allowing internal audit teams to investigate root causes immediately. Early detection prevents minor operational errors from escalating into material weaknesses in financial reporting.

Streamlining External Audit Preparation
Continuous internal control monitoring delivers significant benefits during annual external financial audits. External audit firms can review continuous audit logs and automated control testing documentation, reducing the time required for manual field testing.

This integrated approach lowers overall audit compliance fees, reduces administrative burdens on corporate accounting staff, and provides senior management and audit committees with real-time visibility into the organization’s overall risk profile.

Core Implementation Guidelines
1. Transition to 100% Data Testing: Replace legacy sampling methods with automated continuous audit monitoring systems.
2. Deploy Anomaly Detection Algorithms: Implement machine learning models to identify unauthorized transactions and operational control overrides.
3. Align Internal and External Audit Workflows: Coordinate continuous control testing protocols with external auditors to optimize annual compliance cycles.

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