Get a Leg Up On Getting The Best Tax Breaks
Generally speaking, there is a bit of a lull in work and celebrating during the week between Christmas and the New Year. This is a great time to start preparing for tax time.
A few hours spent collecting receipts, and reviewing credit card and bank statements now will help you get the best tax breaks for 2015. These records may hold a treasure trove of unexpected expenses you’ll be able to claim. So take the time now while you have some quiet time to review and get the best tax break possible.
In addition, here are a few more items to take advantage of if you haven’t already.
Still Time To Make IRA or 401(k) Contribution
If you have time before December 31st, and if you have an IRA or an employer sponsored 401(k) or equivalent type plan, consider making a contribution if you have not yet reached the plan’s limit. The beauty of contributing now is that you don’t get taxed and the contribution will reduce the amount of income tax you owe this year.
Itemize deductions on your tax return. Typically the more itemized deductions you have, the more you can reduce your income tax bill. The IRS offers the following guidelines regarding miscellaneous deductions. “If you itemize deductions on your tax return, you may be able to deduct certain miscellaneous expenses. You may benefit from this because a tax deduction normally reduces your federal income tax.
You can deduct most miscellaneous expenses only if they exceed two percent of your adjusted gross income.
Deductions Subject to the Two Percent Limit.
- Unreimbursed employee expenses
- Expenses related to searching for a new job in the same profession
- Certain work clothes and uniforms
- Tools needed for your job
- Work-related travel and transportation
Deductions Not Subject to the Two Percent Limit.
Some deductions are not subject to the two percent of AGI limit. Some expenses on this list include:
- Certain casualty and theft losses: This deduction applies if you held the damaged or stolen property for investment. Property that you hold for investment may include assets such as stocks, bonds and works of art.
- Gambling losses up to the amount of gambling winnings
- Losses from Ponzi-type investment schemes
Many expenses are not deductible. For example, you can’t deduct personal living or family expenses. Report your miscellaneous deductions on Schedule A, Itemized Deductions. Be sure to keep records of your deductions as a reminder when you file your 2015 taxes.”
If you’ve been in trouble with the IRS in the past, getting the best tax break may not be the only thing on your mind. If that is the case, it’s important to understand that IRS compliance is absolutely mandatory. At IRSALLSTAR, our team of tax professionals is here to help.
Contact us for help with your tax problems and let us keep handling your taxes to ensure you stay out of trouble in the future. You’ll be assured of staying in compliance and always getting a leg up on the best tax breaks possible.