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Year-End Expense Review for Solo Attorneys
A practical, data-backed guide to controlling costs and automating expense workflows.
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and easily manage employee travel and expenses
As a solo attorney or office manager at a small law firm in the US, effectively managing expenses is crucial to maximize tax benefits. expense management for law firms. For a complete overview, see our expense management guide.
- Determine Your Home Office Space:
- Choose Your Method:
- Keep Accurate Records: You should also keep records of your business-related expenses, such as mortgage interest, rent, utilities, and equipment costs.
- For single filers, the range is from $201,750 to $276,750, and for joint filers, it's from $403,500 to $553,500. This may impact your overall tax liability and your ability to deduct your home office expenses.
Year-End Expense Review for Solo Attorneys
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Retirement Savings and Self-Employment Taxes
- Consider contributing the maximum allowed to your retirement plan to take advantage of tax savings. The annual contribution limit for 2026 varies, so check with your plan administrator or tax professional for the current limit.
- Keep accurate records of your retirement contributions and self-employment income to ensure accurate tax reporting and to support your tax deductions.
Remember to review your self-employment tax liability and adjust your retirement contributions accordingly to minimize your tax liability.
Year-End Expense Planning for Small Law Firms
As the year comes to a close, it's essential for small law firms to review their expenses to ensure they are maximizing their tax benefits. Here are some practical steps to consider:
- Review and categorize expenses: Go through all your firm's financial records and categorize expenses into business and personal categories. This will help you identify areas where you can optimize your tax deductions.
- Document business use of assets: Keep accurate records of business use for assets such as computers, printers, and other equipment. This will help you calculate depreciation and other tax benefits.
- Consider charitable donations: If your firm is making charitable donations, ensure you have the necessary documentation to claim these on your tax return.
- Plan for year-end bonuses: If you plan to pay year-end bonuses to employees, consider the tax implications and ensure you are in compliance with relevant laws and regulations.
- Review and adjust business insurance: Review your firm's business insurance coverage and adjust as needed to ensure you have adequate coverage for the upcoming year.
- Take advantage of tax-deferred retirement plans: If you haven't already, consider setting up tax-deferred retirement plans for yourself and your employees to save for the future.
Keeping this simple: Incurdesk turns submitted expenses into clean expense reports. It is built for small law firm teams. Try it free.
Frequently Asked Questions
Can I deduct the cost of my home internet if I also use it for personal reasons?
You can deduct the cost of your home internet if you use it for business purposes and keep records of the time spent on business activities. To do this, you'll need to calculate the business use percentage of your internet bill and only deduct that amount. Keep a log or calendar to track your business use and adjust your deduction accordingly.
What is the difference between the simplified and actual expense methods for the home office deduction?
The simplified expense method allows you to deduct $5 per square foot of home office space, up to a maximum of $1,500 for 2026. If your home office is a significant portion of your space, the actual expense method may be more beneficial, but it's more complicated to calculate.
If I have both W-2 income and self-employment income, how does that affect my Social Security tax liability?
Self-employment income is subject to Social Security tax, but the self-employment tax rate is 15.3% for 2026, which includes 12.4% for Social Security and 2.9% for Medicare. If you have W-2 income, you may be subject to Social Security tax on that income as well. Keep accurate records of your income and expenses to ensure you're calculating your Social Security tax liability correctly.
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