Eyes on Your Money! Tax Season Is Phishing Season – Don’t Take the Bait!
There assuredly are more fun things to do this holiday season than calculate your tax burden. We’ll have some important dates to juggle right now, including last-minute shopping opportunities and time off from school or work.
Before you head out for the holidays and end of the year, confirm that your time, leave, and pay are correct for the end of 2015. Ensure that you don’t run into any issues when you return.
Review your pay slip to make sure all your personal data is correct, including name and address. Look over your federal and state tax withholding elections and decide if you need to make any changes for 2016.
Of-course, W-2s won’t start to mailed out until January, and the deadline for filing taxes isn’t until April 15. However, a host of tax-related decisions you should be making by New Year’s Eve, otherwise they won’t be applicable to your 2015 tax returns when it comes time to file them in a few months.
AA Global Solutions if offering free personal tax return with small $25.00 donation to any one of the two non-profit organizations of your choice. Which you can also take tax deduction.
Remember, Cyber attackers posing as IRS officials are out to hook you during tax season. Find out what to look for and report suspicious emails and phone calls to the IRS.
Click here to find out the action steps you should take now to make sure your money is in tiptop shape for the new year:
- Consider deferring income: If you are self-employed and have had a particularly good year, it may make sense to defer some of that income until next year to reduce 2015’s tax burden.
- Donate to charity: Any charitable giving must be done by the end of the year to be claimed on your tax returns. That means planning ahead if you’re donating a beat-up car to your favorite local charity, to ensure it’s done before New Year’s Day.
- Give gifts up to $14,000: Well-off Americans planning for their estate can make good use of gifts to heirs of up to $14,000 each calendar year. Rather than shoulder a big tax burden upon death, some Americans choose to slowly transfer their wealth to relatives by a yearly tax-free gift.
- Take some last-minute tax deductions: Just as you may want to defer income into next year, you may want to lower your tax bill by accelerating deductions this year.
- Pay your taxes now: Believe it or not, you get a deduction on your taxes just for the act of paying your taxes. This can include property taxes as well as estimated state taxes that can be deducted on a federal tax return. If you prepay your estimated taxes before April, you can deduct that tax payment in some situations.
- Beware of the Alternative Minimum Tax: Sometimes accelerating tax deductions can cost you money, if you’re already in the alternative minimum tax (AMT) or if you inadvertently trigger it.
- Sell loser investments to offset gains: A key year-end strategy is called “loss harvesting” –selling investments such as stocks and mutual funds to realize losses. You can then use those losses to offset any taxable gains you have realized during the year. Losses offset gains dollar for dollar.
- Contribute the maximum to retirement accounts: There may be no better investment than tax-deferred retirement accounts. They can grow to a substantial sum because they compound over time free of taxes
- Avoid the kiddie tax: Congress created the “kiddie tax” rules to prevent families from shifting the tax bill on investment income from Mom and Dad’s high tax bracket to junior’s low bracket. For 2015, the kiddie tax taxes a child’s investment income above $2,100 at the parents’ rate and applies until a child turns 19. If the child is a full-time student who provides less than half of his or her support, the tax applies until the year the child turns age 24.
- Check IRA distributions: You must start making regular minimum distributions from your traditional IRA by the April 1 following the year in which you reach age 70 ½. Failing to take out enough triggers one of the most draconian of all IRS penalties: A 50 percent excise tax on the amount you should have withdrawn based on your age, your life expectancy, and the amount in the account at the beginning of the year. After that, annual withdrawals must be made by December 31 to avoid the penalty.
- Match your flexible spending accounts: Flexible spending accounts, also called flex plans, are fringe benefits which many companies offer that let employees steer part of their pay into a special account which can then be tapped to pay child care or medical bills.
- The advantage is that money that goes into the account avoids both income and Social Security taxes. The catch is the notorious “use it or lose it” rule. You have to decide at the beginning of the year how much to contribute to the plan and, if you don’t use it all by the end of the year, you forfeit the excess.
- Look back at spending: Reviewing where your money has gone so far in the year will help you plan for next year, Brewer says. “Figure out if you need better systems in place, like a separate savings account for travel and vacations, or putting business expenses on a separate credit card,”
- Prepay tuition for spring of next year: You can deduct up to $4,000 from your taxable income through tuition payments. And according to the IRS, this includes not just tuition paid for study in this year, but also any payments for classes that will begin before April 1, next year. This is particularly helpful to folks who just started college or other study in the fall and are under that $4,000 threshold, but will be starting up again in January.
#TaxSeason #AAGS #UDiONFoundation