Keep these numbers in mind when thinking about the 2015 tax year....
* SOCIAL SECURITY taxable wage limit increases from 2014 limit of $117,000 to $118,500 for 2015. Retirees under full retirement age can earn up to $15,720 without losing benefits.
Investors should be aware of inversions
Not like the image here... Some U.S. companies are using corporate inversions to reduce their taxes. Investors in companies that do an inversion may find that their own taxes are increased.
Are you missing a W2, 1099 or other tax form?
If you don’t receive a W-2 or 1099, is this a defense to protect yourself from not reporting the income during an audit?
In short, the answer is no. You are required to report your income whether your employer or customer filed the correct form or not. So what can you do to ensure you do not find an audit surprise in your future due to a simple omission of income from a report you did not receive? Here are some tips:
In this issue:
The Month of December:
Take final year-end actions:
• Gifts
• Capital gains/losses
• Charitable giving
• Dividend income
December 24th: Last day of Chanukah
December 25th: Christmas Day
December 26th: Kwanzaa Begins
January 15th: 4th Quarter Estimated Payments Due
IRS commissioner reveals major concerns
IRS Commissioner John Koskinen recently discussed the major concerns the IRS has as it readies itself for the upcoming tax filing season. The proliferation of tax scams is a big concern with millions of taxpayers already having been taken in by scammers impersonating IRS agents. According to Koskinen, these scammers make threatening phone calls, trying to intimidate victims into providing personal financial information that can be used to steal identities.
A second area of concern is the IRS's involvement in handling the premium tax credits under the Affordable Care Act. Some taxpayers who were given advances on the credits based on income estimates may find that they may be receiving smaller refunds or owing the IRS money after filing their 2014 tax returns.
Please give us a call to discuss this or any of our other topics with you, so we can address your specific requirements.
DiSabatino CPA
Michael DiSabatino
651 Via Alondra Suite 715
Camarillo, CA 93012
Phone: 805-389-7300
ww.sharpcpa.com
This publication provides summary information regarding the subject matter at time of publishing. Please call with any questions on how this information may impact your situation. This material may not be published, rewritten or redistributed without permission, except as noted here. All rights reserved.
15 Year-end Tax Tips
At the end of each year there are a number of things to consider that may have a positive impact on your tax obligation. Here is a list of fifteen ideas that may be worth a quick review.
Don't forget to take your RMD
Did you celebrate your 70½th birthday in 2014? Do you have a traditional or rollover IRA? If both answers are yes, the deadline for taking the initial required minimum distribution from your retirement account is April 1, 2015.
DiSabatino CPA
Michael DiSabatino
651 Via Alondra Suite 715
Camarillo, CA 93012
Phone: 805-389-7300
ww.sharpcpa.com
Pay attention to the IRS rules for charitable deductions
As the year draws to a close, you may decide to donate cash or property to one or more worthy causes. Besides the satisfaction of helping others, there's another reward for your benevolence: a tax deduction on your 2014 return. But the IRS recommends that you keep the following points in mind:
1. You may only deduct contributions made to a legitimate tax-exempt charitable organization.
Four tips for organizing your finances
In our busy lives, it's sometimes tough to corral our financial records. Bills, paycheck stubs, tax returns, and bank statements can disappear into dusty attic corners and bulging desk drawers. Important insurance policies can hide out beneath bins of holiday ornaments and electrical supplies. Mortgage documents can sneak into old books or ensconce themselves in nooks and crannies throughout the house.
Take the time now to coax those papers out of hiding. Here are four suggestions for getting organized.
The Social Security Administration recently announced monthly social security and supplemental security income benefits (SSI) will increase in 2015 by 1.7%. This increase is based upon the Consumer Price Index over the past 12 months ending in September 2014. In addition, other figures based on the national average wage index will also be changed. A recap of the key amounts is outlined here:
In this issue:
The Month of November:
Time is running out for making 2014 tax-free gifts. You have only a few more months to use your annual gift tax exclusion for this year, or it's gone forever.
Advance projections released for 2015 tax numbers
Each year the IRS is required to make inflation adjustments to hundreds of tax numbers in the tax law. Advance projections of what some of the 2015 numbers will be have recently been published.
Make time for a year-end tax review
Take some time to review your tax situation for 2014 while there are still a few months to make tax-cutting adjustments. With more of the Affordable Care Act going into effect for 2014, both individuals and businesses will find that an investment in a year-end review could make a significant difference in their final tax bill.
Most entrepreneurs eventually think about selling their businesses, whether as a prelude to retirement or to pursue other activities. In doing so, they often underestimate the effort required for a satisfactory outcome and overestimate the value and salability of their enterprises. If you're contemplating selling, here are some common mistakes to avoid.
1. Overestimating the value of your business.
There will be a new tax form filling mailboxes beginning January, 2015. This Form 1095-A is a Health Insurance Marketplace Statement. If you participate in the Healthcare Marketplace, you will need this new form prior to filing your tax return. Here is what you need to know.
Each year the tax-filing season begins with the receipt of forms required to file your tax return. Employees receive W-2s from their employers. Individuals receive various 1099 forms for reporting interest, dividends, capital gains and independent earnings as sole proprietors. If you used the Healthcare Marketplace to purchase health insurance, you will now need your 1095-A form to file your tax return.
A reminder to employers: Effective January 1 of this year, you may no longer
Surprise! The Mutual Fund Tax Trap
Too often taxpayers receive a tax surprise at year-end due to actions taken by a mutual fund they own. What can add insult to injury is the unsuspecting taxpayer who recently purchases the shares in a mutual fund only to be taxed on their recent investment. How does this happen and what can you do about it?
Reducing the Savings Account Tax Burden
Money you place in traditional savings accounts is already taxed by both the Federal and State governments. These after-tax deposits lower the amount you have available for savings. Lower deposit amounts also mean lower earnings potential. Then Interest earned on your savings is also taxed. What can you do to lessen this tax burden?
1. Leverage tax-advantaged retirement accounts. Use 401(k), 401(b) and similar programs to deposit pre-tax money into retirement accounts. This way your initial deposits are larger because they have not yet been subject to income tax. This will provide higher earnings on your savings because of the pre-tax contributions. The downside? Your benefits and contributions will be taxed when you withdraw the funds.
