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Tax Planning 2015

The Tax Planning Basket for 2015 – Simple Stuff

Lots of tax changes this year which we won’t go into.  Instead here are 10+ things you can do to have a smaller liability for 2014:

  1. Make Charitable Contributions – Give cash, appreciated investments, keep track of charitable miles driven; clean out your closet and garage, give it away. Keep good records and get receipts.
  2. Fund Your 401K, SEPs or IRA accounts – Take advantage of employer plans or those available to your own business. The numbers for those under 50 can defer $18,000 through their 401K, and $5,500 through a traditional IRA.
  3. Sell Investments with Losses & Offset with Capital Gains – If you do this dollar for dollar capital losses will offset capital gains completely, result not Capital Gains tax.  If you love the investment you sold buy it back after 30 days in the New Year.
  4. Medical Expense Deduction Threshold now 10% of AGI – It’s gotten harder than ever to deduct medical expenses.  As a result, for non-life threatening medical expense try to group them together into one year in which you can take a deduction.
  5. State & Property Taxes, & Auto License fees – They are all deductible, so keep the records.
  6. Mortgage Interest – If you own a home you want to take it.
  7. Deduct Unreimbursed Employee Business expenses – If you have the records and have spent the money for auto, travel, meals, training, etc; get the deduction you are entitled to above 2% if AGI.
  8. Investment & Tax Prep Expenses – Deduct the cost of administration of your investment accounts and preparation of your tax return.

If you are in a business of your own:

  1. Defer revenues into next year (2016) and accelerate business expenses into 2015.
  2. Take advantage of Section 179 and Bonus Depreciation deductions for business equipment purchases.
  3. If you are Self Employed and provide your health insurance make sure to take the Self Employed Insurance Deduction which comes directly off AGI.

Watch out for the “Gotcha” of Alternative Minimum Tax which hits way more middle class folks than it should. Take action now to keep more of your hard earned money in your pocket and out of the governments.