Reduce your income taxes each year by taking advantage of the deductions available!
Medical & Dental Expenses.
These expenses in general are one of the largest expenses for retired people. Good news is that some of these expenses are deductible. If your expenses included health insurance premiums, long-term care insurance premiums, prescription drugs, nursing home care and other out of pocket health care expenses, they are deductible! But you need to itemize your deductions because there is a limit. People under the age of 65 the limit is 10% of your adjusted income. If you or your spouse is 65 and older then the limit is 7.5% until December 31, 2016.
Certain Medicare Premiums
Medicare Part A is not a medical expense. If you’re covered under social security you’re enrolled in Medicare Part A. If you’re not covered by social security you can voluntarily enroll in Medicare Part A and include the premiums you paid as a medical expense. Medicare Part B is a supplemental medical insurance and the premiums are a medical expense. Medicare Part D is a voluntary prescription drug insurance program and the premiums are a medical expense.
Medical Expenses Paid for Relatives
If certain requirements are met and you paid health premiums or uninsured medical expenses for a relative, its deductible. Generally you must pay over half of his or her support for the year.
Selling your House
If you lived in your main home for at least two of the five years before you sell your home the profit you make on the sale, up to $250,000 for single taxpayers and $500,00 for married taxpayers filing jointly is not taxable.
Retirement Plan Contributions
You can make deductible contributions to retirement plans such as IRAs. Those over 50 have higher contribution limits for tradition IRAs, Roth IRAs and 401(k)s. Retirees with their own businesses may also establish SEP-IRAs. Simple IRAs, Keogh plans and solo 401 ( K) plans that have higher contribution limits for those over 55.
If you give back to the community by making charitable contributions some of those contributions are deductible as itemized deductions, subject to limitations. Cash contributions of up to 50% of your adjusted income are deductible each year.
Source: Elder Law News Photo: Pexels
1. What documents do I need to give my CPA to do my taxes?
The most common tax forms are: a W-2 from your employer and a 1099-INT for interest received. Mortgage interest statements and charitable contribution receipts are also very common to have. When in doubt save it and ask.
2. I didn’t earn much last year – do I still need to file taxes?
In a nutshell, yes. Americans should file an income tax return even if their total income is below filing requirements. Complete the necessary forms because money can and is left on the table by those who think they don’t need to file. An example of this: reimbursable education credits.
3. Dependents, who can I claim?
Your children may qualify but our society is finding more and more families with elderly parents or relatives now living with them. Significant others or friends overstaying their welcome on your sofa may be claimed, if they meet certain qualifications.
4. We have children now, what deductions or credits are available?
These credits are dependent on income, expenses and on qualifying children.
5. Our oldest is heading off to college, are there any tax benefits available for them?
Education tax credits and deductions are available; these may include: tuition and fees, and books and supplies. Education tax benefits and deductions are available under the following tax provisions:
6. What paperwork do we need to keep and for how long?
Federal income tax returns are here to stay. Copies of your tax returns and all backup documentation must be kept for three years. For additional information see
If you don’t want a pile of papers one solution is to scan and save your documents as PDFs to a USB drive. Keep that drive with your other important papers (marriage certificates, birth and death certificates, my business card…) in a fire proof safe or a safety deposit box.
You must be able to itemize your tax return to take charity deductions. If you can’t itemize this year you can bunch your deductions and make your contributions next year. There are different types of donations.
If you donate cash and don’t receive a receipt you don’t have a deduction. You can no longer deduct cash donations. You must have a cancelled check , bank record or receipt from the charity regardless of the amount you donate. If the donation is more than $250 a receipt is always REQUIRED.
Non Cash Donations
These can be shoes, clothes, books, furniture and appliances you donate. Unless in good condition the items will not qualify for a deduction. This means you need to add a notation labeling the condition of the donated items. You will also need a receipt from the charity along with your inventory. It is also a good idea to take pictures.
Non Cash Donations over $500 but not over $5000
Your itemized inventory must also include when and how you came to possess the property. Examples are: purchase, gift, inheritance or exchange. Your records must also include original cost or other basis.
Near Cash Donation
These expenses occur when you make purchases for the benefit of the charity. Example buying supplies for Sunday school, canned goods etc. Besides having a receipt you must also have a receipt acknowledging the donation to the charity.
Do you have stock that has appreciated in value? Give the shares to the charity. You wont have pay taxes on the capital gains and you will receive a charity deduction for the fair market value of the shares on the day of the gift.
Source: The Tax Network Photo:Pexels
Are your investments subject to the 3.8% Net Investment Tax? It targets things like vacation homes and investment properties owned by high income individuals who exceed the threshold.
This law requires a tax of 3.8% on the lesser of either your net investment income or the amount by which your modified adjusted gross income (MAGI) exceeds a certain threshold.
Here’s a few examples of what is generally included:
Please make sure to consult your personal CPA with question on the Net Investment Tax and how it pertains to you. But always BE TAX ADVANTAGEOUS!
Source: American’s Tax Solutions / www.irs.gov
That’s April 1st the deadline! DEADLINE: April 1st If you are an IRA owner and turned 70 1/2 in 2015, you have until April 1st, your required beginning date, to take your first required minimum distribution if you did not take it last year. Keep in mind that you still have to take y our 2016 required minimum distribution by the December 31st deadline. DEADLINE: April 18th
Eligible IRA owners have until April 18,2016 to contribute up to $5,500 to their IRA(s) ($6,500 if age 50 or older) for 2015. Remember this is an aggregate limit. April 18th is also the deadline to remove excess contributions made to an IRA(s) for 2015. To avoid the 6% penalty tax, excess contributions must be removed in a timely manner, completed no later than your tax return due date including extensions. And there is one more… health savings account contributions to an approved high-deductible plan. For 2015, if you had self-only HDHP coverage, you may contribute up to $3,350. Certain eligible individuals who were over age 55 at the end of the tax year may increase their contribution by $1,000. If you have family HDHP coverage, you may contribute up to $6,750.
As always consult your tax professional to be and keep tax advantageous!
It was once said, to me, that the smallest amount of money spent on a home would be the down-payment. I’m not sure that I agree but there are steps homeowners need to know to be most tax advantageous.
First, gather your documents – the last couple years’ tax returns and your home loan documents – and make an appointment with a tax professional. There may be an initial consultation fee but most apply it to the cost of completing and filing your federal tax return. Either way, the time and money you spend planning will save you in the end.
As a homeowner you’ll be filing a 1040 Schedule A to be able to itemize costs of mortgage interest, property taxes, mortgage insurance and any points paid. These are items that you’ll be tracking. Additionally you’ll be able to itemize your charitable deductions.
During your consultation make sure to review income and exemptions. It may be time to update your W-4 for you may be able to claim more exemptions.
Remember that this is your time with a tax professional. Come with a list of questions and do not be afraid to ask. There are no stupid or silly questions when it comes to being tax advantageous!
Photo credit: https://www.flickr.com/photos/jdhancock/3446025121
Saying that Las Vegas offers a wide variety of entertainment choices is saying a lot. From touring hotel and casino bright lights to getting your picture taken with Elvis at the “Welcome” sign; to dining and watching the best entertainment offered or enjoying the local ballet company to spending an afternoon at the Smith’s Center with a Broadway show or hanging out at the ballpark with the Area 51s there is certainly a lot to choose from.
Which brings me to the point, is a gift of tickets to a customer itemized as a business gift or an entertainment expense?
In a nut shell, when a business provides a customer with event tickets the tax treatment depends on whether an employee of the corporation attends the event with the customer.
Giving tickets without attending with your customer the costs may be treated as a business gift or as entertainment. But if an employee attends, the tickets are considered entertainment.
The rewards of customer loyalty greatly exceed the cost of a simple thank you especially when it is said, “Vegas style.” Whether you attend and enjoy with them is your choice.
Be Tax Advantageous and choose wisely.
Are you operating your business under a single-member LLC? This entity has no effect on how the income or losses are reported.
Single-member LLCs that have rental properties titled to it have the income is reported on Schedule E, even if tax documents are issued with the LLC’s EIN.
Questioning your business entity choice now? If you would like to review your entity choice and its tax implications call me to schedule a consultation.
Being Tax Advantageous NOW may save you a lot later.
Beginning January 2016 you may request to receive your tax returns electronically. We’ve already been submitting them this way and it’s worked well. As usual you’ll receive the submission approval form, which you will still need to sign and return (scanned and emailed or faxed) before the return can be sent. Your eCopy will be securely sent with password protection. Do not worry your password will be unique to you and easily remembered.
We will continue to send you a printed version as we have in the past. However requests for additional copies or copies of prior years will be billed at $25 per return.
REMEMBER… It’s important that your documents be filed away safely. So you may wish to invest in a USB hard drive dedicated to your important documents – storing it within a fire-proof safe. Scanning significant paperwork at first takes a little time but truly worth it in the end.
A donation is a gift. A (tax) deduction is variable tax dollars subtracted, (or deducted), from ones gross income.
Rules to Know…helping others helps you
So many rules to remember, and all you really wanted to do was clean out your closets and be able to park your car in the garage once more.
Photo credit: https://www.flickr.com/photos/fhwrdh/4551794085
Even though we spend so much more time than before online interacting virtually we must get out and about – our customers and clients enjoy seeing us! So owning an automobile of some type is a necessity for business owners. And guess what…
The IRS is giving us a perk, a/k/a deduction. Beginning January 1, 2015, the IRS raised the standard mileage rate for car, van, pickup or panel trucks standard mileage rated from 56 cents to:
As taxpayers, we have the option of claiming actual mileage or operating costs. Mileage, of course, is the number of mile driven for business, and operating costs can include:
Making the decision, mileage or operating costs, is a discussion to have with your tax expert. Whichever way you chose you must keep track of your mileage! At the beginning of each year I write down (in a master business calendar) my car’s current mileage and then I continue to add appointments – making notes of where I went, who I met with and what was covered. Remember that the IRS loves documentation (and so does your CPA).
Photo Credit: https://www.flickr.com/photos/pictures-of-money/17307620362
Have you seen unexplained withdrawals from your bank account, had merchants refuse your checks, been told by the IRS that more than one tax return was filed in your name, or received medical bills for services you didn’t use? If so, you may be one of millions of victims of identity theft (13 million in 2013!) that happen each year. The Federal Trade Commission advises that you take these immediate steps:
1. Notify your bank and credit card companies by phone and in writing.
2. Place an Initial Fraud Alert on your credit report by calling one of the three credit-reporting companies. This will make it harder for a thief to open more accounts. The company you call must tell the other companies.
Equifax 1-800-525-6285 in U.S., or 1-800-465-7166 in Canada
TransUnion 1-800-680-7289 in U.S., or 1-800-663-9980 in Canada except in Quebec (1-877-713-3393 for Quebec residents)
to repair your credit by sending this report to the three credit reporting companies, asking them to block the disputed information on your credit reports. For sample letters, search “disputing errors with credit reporting companies” at www.consumer.ftc.gov.Experian 1-888-397-3742 in U.S., no longer in Canada
3. Order free credit reports from each of the companies and review them carefully. In the U.S., go to: www.AnnualCreditReport.com or in Canada learn how to get free credit reports by mail at:
If you know which account has been tampered with, contact that company’s Fraud Department and follow up in writing. If your social number has been used, call the Social Security fraud hotline at 1-800-269-0271 for the U.S., or for your Social Insurance Number inform the Canadian Anti-Fraud Centre at 1-888-495-8501.
4. Create an Identity Theft Report. Follow instructions at www.ftccomplaintassistant.gov to complete an affidavit. Print two copies of the affidavit and give one to your local police department or the police department where the theft occurred. The police report and the affidavit make up an Identity Theft Report. In Canada, go to www.antifraudcentre.ca and click on “Report It.”
5. Begin to repair your credit by sending this report to the three credit reporting companies, asking them to block the disputed information on your credit reports. For sample letters, search “disputing errors with credit reporting companies” at www.consumer.ftc.gov.
Reprinted from: Carol A. Kilgore
RE/MAx Excellence | 702-595-4636
Vegashmsel@aol.com | http://www.carolkilgore.com/
Pic credit; http://www.picserver.org/i/identity-theft.html
It’s late February and some people are already experiencing intaxification and all the excitement (and vacation planning, shopping, paying off debt, etc.) that comes with it. If you watch television you may be experiencing intaxification envy.
Are you scratching your head wondering what this is? Well, some people have received their federal income tax refunds (intaxification) and the green bow-tie guys (you’ve seen them pushing money out the back of the airplane) are advertising how cash floats down from the sky when using their services (intaxification envy).
Investopedia explains intaxification as, “The feeling of satisfaction and joy that a tax refund creates in a person.” Think about it; what are you really receiving? A refund of non-interest earning money that you paid. It’s a check for overpayment!
As I say, Be Tax Advantageous, plan, prepare, and don’t pay a dollar more than you should. Notice that nothing was said about tax planning for 2015 to ensure that you had more money in every paycheck.
Call Rhonda to Be Tax Advantageous.
Rhonda A. Mannes,