It’s a new year and it’s getting close to tax time. Most of us are busy and ignoring what needs our attention. If you are one of those rushing to the post office with your return on April 15th, that’s not good! Now’s the time to slow-down and be intentional about how you can save more money. There are changes to the tax law and tax savings opportunities that you will want to evaluate sooner rather than later.
Think the clock has run out on making 2015 contributions? Think again and consider these tax savings opportunities:
- Depending on your income, you may still be able to make a 2015 contribution into an IRA up to April 15th of this year.
- Depending on the state where you live, you may be able to deduct your 529 plan contributions.
- If you are self-employed, you may still set up a retirement plan for last year and make contributions.
- You should keep track of every deduction you can take for last year including charitable gifts.
It is so easy to get busy and not do what it takes to save money. I hate keeping track of mileage for my business trips, but if we do not take the right action, we are literally giving more money to Congress than what is necessary.
Whether you are preparing your own tax return or leaving it to a professional, be sure these recently revived, or made permanent, tax savings are not over looked:
- College credit for $2500 for 4 years of college
- Teachers can deduct $250 for classroom supplies
- State sales tax deduction has been revived
- Tax-free donations from IRA’s are a permanent part of the tax code
- Tax-free discharge of mortgage debt
- Pay for computers for college from 529 plans tax free
- The revision of the $500,000 for business equipment deductions
- Tax deduction for college tuition
- Tax deduction for private mortgage insurance
Of course, I’m not sure what permanent means. But it is important that we pay the least amount of taxes so we can have the most choice of what we do with our discretionary income. Wouldn’t you rather save more, invest more, spend more, or even give more to charity than pay more in taxes?
Note: This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.