As seen in Accounting Today
Last Minute Tax Tips
With this year’s tax deadline looming, it’s easy to miss some of the basics while you are scrambling to file your tax returns. If you’re currently not working with a firm like Plumb Family CFO, who provides an Annual Tax Organizer in advance of the deadline and works closely with client’s CPAs to deliver the most holistic view of personal finances, here are some tax tips to consider.
8 Tax Tips:
- Fear Not the Extension: An extension doesn’t raise a red flag with the IRS, so it’s best to get your ducks in a row and file later.
- Let Entrepreneurs Wait on Funding SEP Plans: Small business owners and sole proprietors can wait until Oct 15 to fully fund their simplified employee pension (or SEP) retirement plans — which allow them to contribute up to 25% of the income on which they pay Social Security Tax.
- Accelerate Deductions for 2014: Many deductions may expire in the 2015 tax year, from Section 179 in the Tax Code (no one knows if they will be extended).
- Put Alimony in an IRA: Alimony is considered “earned income” – which is taxable compensation, so it qualifies for an IRA account.
- Make Up for Lost Time: Think about retirement. Some clients can open up a SEP right before they file tax returns – depositing up to 25% of their income.
- Take State Deductions on Lease Income: Lease holders must file a state tax return whenever they derive this income from, but some states offer a deduction on that income.
- Switch Deductions among Divorced Couples: The IRS is phasing out certain deductions for high earners, so formerly married couples may want to switch some deductions from the high-earning parent to the lower-earning parent to reduce tax payments.
- Max Out 401Ks: Clients are better off putting the maximum amounts into their company’s retirement plans.
Do you need help organizing your financial life? Learn more.
Experience the Plumb Family CFO difference this tax season.
Utilizing our 7-Step Process, Plumb Family CFO handles your preliminary tax work for year-end and provides an overview of your financial information with our Annual Tax Organizer. Throughout the year, Plumb works in partnership with our client’s CPA’s and trusted advisors to provide the highest quality data and financial reporting in preparation for filing tax returns.
Annual Tax Organizer: Step 7 “pulling it all together”
The end result is a one-page tax summary sheet outlining information sent to our client’s CPA. The process of “pulling it all together” includes tracking and recording 1099′s, K-1′s, charitable contributions, medical expenses, sales of stock and all other income. This ensures that our client’s have accurate record-keeping, while also reconciling all asset accounts for accuracy.