Educate your kids about tax filing

Educate your kids about tax filing

According to a recent survey conducted on behalf of a consumer finance information service, nearly 80% of 18-34 year-olds have concerns about filing income tax returns. Of that group, 34% ask families and friends for advice. Do you know a young adult who is anxious about getting this year's tax return completed correctly? One way you can help ease the stress is by scheduling an appointment for a family tax and financial talk with us. We're here with answers and advice.

Get credit for retirement contributions

Get credit for retirement contributions

Did you make contributions to a traditional or Roth IRA, a myRA, or a SEP or SIMPLE plan in 2015? You may qualify for the Retirement Savings Contributions Credit, more popularly known as the "saver's" credit. If you're eligible, you can apply this federal income tax credit against the tax you owe on your 2015 return. The credit is available even if you take a tax deduction for a traditional IRA contribution, as well as for IRA contributions for last year that you make before the April due date of your return.

Hiring workers can bring tax breaks

Hiring workers can bring tax breaks

 The Work Opportunity Tax Credit, known as WOTC, can reduce your federal income tax liability dollar-for-dollar when you hire certain workers. The credit is available for 2015 if you hired workers from "targeted" groups, such as ex-felons, food stamp recipients, and Supplemental Security Income recipients. Beginning in 2016, you can also claim the credit when you hire individuals who were unemployed for at least 27 consecutive weeks and who received unemployment compensation.

New tax benefits available when claiming the research and development credit

New tax benefits available when claiming the research and development credit.

If you conduct qualified research activities, you may be eligible to claim a federal income tax credit known as the "research and development" credit. This credit is now permanent and may benefit you when you design, develop, and improve business products or processes. Beginning in 2016, the research and development credit can be applied against your alternative minimum tax liability. In some cases, the credit may also be applied against up to $250,000 of payroll taxes.

Which depreciation method is best for your business?

Which depreciation method is best for your business?

When you purchase assets and use them in your business, you have several options for deducting the cost. For example, you may choose to write off the full cost using Section 179, an alternative that lets you expense up to $500,000 of new and used equipment purchases. You can also use "bonus" depreciation to write off up to 50% of the cost of new assets with a life of 20 years or less. In both cases, you apply regular depreciation methods to the remaining value of the assets. The best way may not be a single choice, but rather a combination that optimizes your tax benefit. Contact us for a depreciation review.

One more extension for estate executors

One more extension for estate executors 

A law passed last summer added a new task for estate executors and others who file estate tax returns after July 31, 2015: providing a statement of the value of estate assets to beneficiaries and the IRS. The statement is designed to ensure consistency between the value of the property for estate tax purposes and the basis a beneficiary reports for income taxes. The information is filed on Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent. If you're required to complete Form 8971 before March 31, 2016, you do not need to do so until March 31, 2016. (The original due date was February 29, 2016.)

No need to itemize to claim these deductions

No need to itemize to claim these deductions

Are you part of the approximately 68% of taxpayers who IRS statistics say claim the standard deduction instead of itemizing? If so, you can still deduct some expenses on your 2015 federal income tax return.

●  Individual retirement account (IRA) contributions – For 2015, you may qualify to deduct up to $5,500 in contributions to a traditional IRA. That increases to $6,500 if you're age 50 or older. Income limitations may apply in some cases. The same limits apply to Roth IRA contributions, which are not deductible.

●  Health Savings Account (HSA) contributions – HSAs are IRA-like accounts set up in conjunction with a high-deductible health insurance policy. The annual contributions you make to your HSA are deductible. Contributions are invested and grow tax-free, and you withdraw the money tax-free to pay unreimbursed medical expenses. The HSA contribution limit for 2015 is $3,350 for individuals and $6,650 for families. You can contribute an additional $1,000 when you're age 55 and older.

●  Student loan interest and tuition fees – Deduct up to $2,500 of interest on student loans for yourself, your spouse, and your dependents. For 2015, you can also deduct up to $4,000 of tuition and fees for qualified higher education courses. Income limitations apply, and you must coordinate these deductions with other education tax breaks.

●  Self-employment deductions – If you're self-employed, you can generally deduct the cost of health insurance premiums, retirement plan contributions, and one-half of self-employment taxes.

●  Other deductions – Don't overlook deductions for alimony you pay, certain moving expenses, and early savings withdrawal penalties. Educators can deduct up to $250 for classroom supplies purchased in 2015.

Contact our office for more information on these and other deductions you may be entitled to claim on your 2015 return.