The last thing anyone wants to hear, especially now, is get ready for your 2015 taxes. But a wise man knows a little adjustment now can mean $1000’s of dollars to you come next April 15.
What are the essentials to prepare now for the 2015 tax deductions List?
- Do you have a health-plan, like Obamacare in place? You may qualify for a tax credit.
- Some companies offered a FSA account for their employees. You may still have funds from 2014 still in your account.
- Do what you must to avoid an audit. Report all income, especially if there is a paper trail.
- If you haven’t started that home-based business yet, now is the time to cash in on the ease of the home office deduction.
- You also should be looking into tax-related ID Theft.
What is New for 2015
It was inevitable that the new check box for providing health insurance for your family would be on this year’s tax return. It is the law now. You must let the IRS know whether you had the minimum essential health care coverage, or you were exempt.
Last year the penalty was a low 5% of your taxable income for not having the required minimum health care coverage. This year if you still don’t have the required minimum coverage or you are exempt (of if anyone in your family falls into that category) the penalty will be $95 per adult and $47.50 per child with a maximum per family of $285.00.
If you have a family then you should provide them with the health care coverage they deserve. You owe it to them.
A new startling fact is that now the biggest reason for bankruptcies today are from medical procedures, or healthcare costs because of no insurance or lack of enough insurance.
The ACA Tax Credit: This is our wonderful governments way of helping taxpayers pay for insurance they bought through the exchanges. It is not a standard deduction so you can’t file a 1040EZ to claim this tax credit. You have to claim it on the long form of 1040 or 1040A. You can also claim it for your 2014 tax year on form 896
The FSA Dollars: You may be used to thinking that if you don’t use the money before the end of the year, you lose it. This has changed. Now the companies that are participating can allow a carry over of $500 in FSA funds to the next benefit year. This means that if your company has done this, you still may be able to to use up your 2014 dollars NOW!
It doesn’t cost you anything to check with your benefits department. You can also go to fsastore.com where everything it sells is legit for FSA purposes.
Report all of your income. The workers that are members of the “gig economy” are up to 30% according to the Bureau of Labor Statistics. This number is up for the 12% of members that were reported in 1999. Any discrepancies that you report versus what your employer reports will automatically trigger a “correspondence audit” or a letter from the IRS.
Syncing income from various sources can somewhat be a challenge so to avoid this “trigger”, be prudent in the income that you report.
Don’t forget the home office deduction. You are in luck because the IRS has relaxed the rules for people who don’t have a fixed location for their businesses. You get to claim this valuable deduction even if you don’t use this space to meet your clients there. However, this space has to be exclusive for business only.
The other great news about having a home office is since this space is for business only, like a spare bedroom, you can use it for other business uses, like starting a home based business online!
Who says that selling stuff on eBay is not a legitimate business? Or blogging and selling various things online? This is a business that gets entitled to every tax deduction that a regular business gets to claim, such as:
- Rent or mortgage interest
- Office furnishing
- Office supplies, computer, fax, printer, paper, ink, stamps, etc
- Hazard insurance
- telephone service
I can keep going on, but you get the idea. To take advantage of these beneficial tax deductions that the IRS gives you, get my Home Business Tax Deductions. You will be glad you did.
Grab every Deduction
It would be difficult to claim any stock market losses in your portfolio with all the gains it has been incurring over the last year. However, there may be valuable other things to make better use of these gains.
1. Parents or even grandparents may consider making a five year contribution to their child’s 529 education plan, all at once. So this would allow a couple to put up to $140,000 per child away. In a 529 paln all the interest grows tax-free, but the funds must be used exclusively for college only.
2. Another plan is to fund a charity with your appreciated funds rather than just writing them a check. The charity will not have to pay capital gains tax as you would. This makes giving an even brighter choice!
3. By itemizing your tax return, you are allowed the option to claim either your sales tax or your state income taxes you paid. So for example you may have bought a new car, there by claiming the sales tax be an advantage over your state income tax.
Also be very careful of identity theft. Most fraudulent tax claims are made early in the season so by the time you file you will only receive a notice that someone using your SS number already files. In this case, first file a report with your local police, send a complaint with the Federal Trade Commission at Identitytheft.gov, and then contact at least one of the three credit bureaus to put a freeze on your credit so no further damage can be done.