Last-Minute Moves That Can Lower Your Tax Bill
Only one month to go until tax filing day! That means you still have time to trim your 2015 tax bill. Here are last-minute moves to consider and deductions to remember.
Maximize your 2015 IRA contribution. You have until April 18 (or April 19 if you live in Maine or Massachusetts) to make deductible 2015 contributions to a traditional individual retirement account. The maximum contribution is $5,500 for 2015 ($6,500 if you were 50 or older last year).
Check for overpaid social security tax. Did you change jobs in 2015? Calculate whether excess social security taxes were withheld. If you paid over $7,347, you can claim credit on Form 1040 for the excess that was withheld by multiple employers.
Look into itemizing deductions. The standard deduction for 2015 is $12,600 when you file jointly ($6,300 when you’re single). Total your allowable deductions to see if you paid more than that amount in actual expenses. Examples include:
- State and local income taxes or state and local sales taxes. You can choose which will provide the most benefit.
- Medical deductions. You can deduct out-of-pocket costs to the extent your expenses exceed 10% of your adjusted gross income. Remember items such as eyeglasses, hearing aids, and parking, tolls, and mileage related to medical appointments (deductible at 19¢ a mile).
- Charitable parking, tolls, and mileage (deductible at 14¢ a mile).
- Miscellaneous deductions such as tax preparation fees, safe deposit box costs, and certain investment advice.
Remember above-the-line deductions. Student loan interest is deductible whether you itemize or not. So are qualified tuition and fees you paid for yourself, your spouse, and dependents. If you’re an educator, you can deduct up to $250 for classroom supplies that you purchased with your own money.
Want more tips for lowering your tax bill? Contact our office for details or tax filing assistance. We specialize in serving small-to-midsize companies!