Tax and Business Planning Tips
Did you pay Real Estate Taxes?
There may be a deduction for real estate taxes paid available to you as part of itemizing deductions.
Did you install Energy Efficient Property?
There is a 10% tax credit for the cost of qualified energy-efficient improvements. Qualified improvements include adding insulation, energy-efficient exterior windows and doors, and certain roofs. The cost of installing these items is not included in the credit calculation. There is a lifetime limitation of $500, of which only $200 may be used for windows. This credit is available through 2016.
Did you buy a New Car?
If you bought a car you may be able to deduct any state and local taxes paid on the new car.
Do you drive your vehicle for business, charity or medical appointments?
Take a picture of your odometer at the end of the year for an accurate ending mileage. It is best to keep a log that includes dates, destinations and the reason for travel. Keeping a log and recording your ending odometer mileage makes it easier to determine deductible miles at tax time.
Did you pay student loan interest?
While repayment of the principal portion of your debt is not tax deductible, you can take an above-the-line deduction for up to $2,500 of interest that you pay in a year, as long as you meet certain conditions such as an income limit. "Above-the-line" means the interest deduction reduces your taxable income before you take other eligible Schedule A deductions or your standard deduction into account.
Did you make contributions to a Health Savings Account?
You may claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040.
Are you retiring soon?
If you have decided it is your time to leave the workforce, one of the decisions to make is whether you will need to pay estimated taxes. While you may expect your income to decrease when you're not working, remember that you might be withdrawing funds from retirement accounts, selling investments from your brokerage accounts, and drawing social security. All those sources of income can be taxable on your federal income tax return. Take time now to run the calculation. As always, we're here to help you determine what course of action is best for you.
Have you hired individuals from certain target groups that may qualify your business for a tax credit?
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers who hire and retain veterans and individuals from other target groups with significant barriers to employment. The tax credit employers can claim depends upon the target group of the individual hired, the wages paid to that individual in the first year of employment, and the number of hours that individual worked. There is also a maximum tax credit that can be earned. The tax credit must be applied for within 28 calendar days of the employee's start date. As always, we are here to help you determine if a tax credit is available.
Have you organized your business's chart of accounts lately?
If you haven't revised your business's chart of accounts since you initially set it up, you may be missing out on an easy way to simplify your life at tax time. That's because your chart of accounts is more than a basic bookkeeping tool. Your chart can also help you keep track of items that affect your tax return. Organizing business income for sale of goods and services to customers, rents, royalties, interest, dividends, gains from the sale of business and investment assets, and "miscellaneous" receipts. Separating expenses by ordinary and necessary business costs, from expenditures that produce benefits in future taxable years, such as equipment.