10 YEAR END TAX TIPS for 2015

PLAN AHEAD TO SAVE MONEY  tax-saving-time

  • Charitable Donation Records

If you claim a charitable deduction of more than $500 in donated property, you must document the donations on your tax return. If you are claiming a deduction of $250 or more in a single donation, you will need a written acknowledgement from the charity.

  • State Residency Status

For individuals who split their time in two different states throughout the year, now is an excellent time to consider where you may be taxed as a resident. To make it more likely that the high-tax jurisdiction will respect the move and not continue to tax you as a resident, you should track the number of days you are spending in each jurisdiction.

  • Remember your State and Local Obligations

Don’t forget that state and local governments impose their own filing and payment responsibilities with various income, sales, and property taxes. These taxes are deductible on the Federal tax return, in the current year, if paid prior to December 31st.

  • Prepare your Report Information

You should start gathering information early this year to make sure you can complete your mandatory reporting on time. Congress has enacted new legislation that more than doubles most penalties for late or incorrect information returns. This includes the Form 1099, which must be provided to any contractor if a business pays at least $600 for services .

  • Accelerate Deductions and Defer Income

The time value of money can make deferring (postponing) tax almost as valuable as escaping it. Generally, you want to accelerate deductions and defer income. There are plenty of income items and expenses you may be able to control. Certain retirement plans can help you postpone the payment of taxes on your earned income.

  • Manage Your Gains And Losses

Capital gains and losses present excellent opportunities for deferral because you have nearly complete control over when you sell them, but be careful when harvesting losses. Generally, you cannot use capital losses against other kinds of income, however you can offset capital gains in full.

  • Bunch Itemized Deductions

Many expenses can be deducted only if they exceed a certain percentage of your adjusted gross income (AGI). Bunching itemized deductible expenses into one year can help you exceed these AGI floors. Consider scheduling your costly non-urgent medical procedures in a single year to exceed the 10 percent AGI floor for medical expenses (7.5 percent for tax payers age 65 and older). To exceed the 2 percent AGI floor for miscellaneous expenses, bunch professional fees like legal advice and tax planning, as well as unreimbursed business expenses such as travel and vehicle costs.

  • Make Up A Tax Shortfall with Increased Withholding

Don’t forget that certain kinds of taxes are due throughout the year. Check your withholding and estimated tax payments now while you have time to fix a problem. If you are in danger of an underpayment penalty, try to make up the shortfall by increasing withholding on your salary or bonuses.

  • Year End Retirement Planning

Contributions to an employee 401(K), 403(B), or 457 plans will reduce your W-2 taxable wages for the current year. The Employee contribution limit for 2015 is $18,000. For people over 50 years of age, the contribution limit is $24,000.

  • Check On Congress –

One of the most important things you can do for tax planning is to keep an eye on Congress to see whether lawmakers manage to extend popular tax provisions before the end of the year. The following enjoyed tax provisions require an extension from Congress in order to be carried into the upcoming year:

  • Companies to receive a credit for qualified research expenses
  • Businesses to deduct up to half of eligible equipment placed in service this year
  • Students and parents to receive an above-the-line deduction for tuition expenses


Steven Z. Freeman, CPA provides trustworthy and professional Business Accounting and Tax Planning and can assist you with these services. If you have any questions on this matter, or to schedule an initial consultation, Please call us at (805) 495-4211.

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