Tax laws are ever changing and they can be difficult to keep up with. Several tax rates and tax breaks were made permanent in 2013, which resulted in tax increases for certain taxpayers especially those considered high-income earners. After a year of these tax laws being in effect, we’ve turned over the calendar and again tax season is upon us. When you go to a professional to prepare your tax return, it is important you pick an individual or a firm you can trust. After all, you’re providing them with all your most personal information.
While most of you will be sitting down with a tax advisor in the Philadelphia and surrounding areas to prepare your returns, right now you’re more than likely sifting through records and documents on your own time, as well. Before you meet your tax planner to file your returns for 2014, there are tax ideas to consider.
Consider a Roth IRA Rollover: It may be in your best interest to convert a traditional IRA to a Roth IRA. If it makes tax sense for you to make an IRA rollover under the guidance of your tax and financial advisors, a rollover conversion results in tax currently however, the resulting Roth IRA will avail growth tax free into your future.
Gift Tax Exclusions: In 2014, the annual gift tax exclusion amount was $14,000 for an individual filer and married couples can spend $28,000 in gifts. Gifts include charitable contributions, and any transfer of money where consideration is not received from the recipient. Consider the option each year to make gifts as an opportunity that eventually develops into your future estate tax planning. Your tax advisor can help provide you significant input on both the gift giving and estate planning options. Take your tax return preparation time to pursue these discussion with your tax advisors.
Check your Finances: Plan for the future and assess your finances. Consider the above scenarios, and also determine your cash flow, investment portfolios, health care, retirement, and estate planning. Look at options at work and re-consider employer-sponsored programs to reduce your taxable income in the future.
Consider 401K Contributions: In 2015, you can contribute $18,000 maximum to a 401(k) plan. If you are 50 or older, you are also permitted to put an additional $5,500 away. Maximizing contributions into an employer sponsored 401K plan makes sense especially when in many cases the employer maximizes contributions it makes to the plan on your behalf.
Keep Records: The IRS requires accurate record-keeping of any business expense. Accurate record keeping supported by accurate receipts and detail for all your business expenses is very important. If by chance the IRS determines the need for an audit, the responsibility lies on you to be able to support all the items reflected as income and expense on your tax return.
To speak with a tax accountant in Philadelphia for further advise, and to plan accordingly, contact the offices of Zinman & Company PC before April 15, 2015 to help you report for 2014 and plan for 2015 to achieve your goals .