December 4, 2015
It’s the end of the first week of December and 2015 is coming to a close. It’s important to start thinking about your taxes for the year. Chief among those thoughts should be the dozens of expired tax breaks congress did not renew for 2015. Some of the continuing tax extenders include schoolteachers having the ability to take an above-the-line deduction for supplies in their classrooms they purchased on their own. There are also deductions that may have been allowed in previous years, but may not be deducted for this year the tax deductions were not extended by Congress. Examples of these deductions include qualified charitable distributions for those with IRAs that can be directly given to charity. For taxpayers living in states with low income taxes or those who have had several sales tax expenses, you may not be able to apply the tax deduction.
Regardless of where you fall in the economic spectrum, you should have at least a basic understanding of your tax bracket to get an understanding of your tax burden. Perhaps you’ve reached an upper tax bracket; or you’ve been in a higher one for a while and have taken losses this year, and now you’re in a lower bracket. The best course of action, no matter your situation, is to look at the big picture. Make projections for what you think 2015 should look like, and then determine what actions are best suited to your goals. Tax experts like Bloch, Rothman, & Associates can assist you with those details.
The next step is to take a look at your deductions. If you can identify potential deductions such as charitable contributions and real estate tax payments, you are one step ahead. The end of the year is also an ideal time for those in the highest tax brackets to figure out their estate planning.
2015 is also the year many parts of the Affordable Care Act became an essential component of tax planning. If you didn’t have health insurance in 2015 you will very likely incur a tax penalty. The penalty is higher this year than last as the program has become more established and governmental agencies have worked through some of the bureaucratic delays in enforcement. If you did not have health insurance last year (2014), and still did not in 2015, the penalty may be compounded. It is important to talk to a professional about some of the effects that the ACA may have on your tax burden both this year and in year to come.