For many, the sting of holiday spending will present itself in the coming weeks by way of credit card bills and department store charges. Spending aside, the few remaining days of the year also present an opportunity to reduce your taxes, whether you are an individual taxpayer or a business owner.
Our tax team has compiled their top ten action steps to ease the burden and possibly lessen the blow of taxes owed come April 15.
For Businesses
1. Hire an unemployed veteran and receive the work opportunity tax credit
2. Hire independent contractors (no payroll tax due)
3. Track business travel and entertainment expenses
4. Track lunch meetings; (50%) is deductible (within reason – keep receipts)
5. Deduct the business use of your car
6. Deduct the cell phone expense portion for your business
7. Utilize the home office deduction
8. Set up a tax-favored retirement plan
9. Buy machinery and equipment before year end and utilize Section 179 deduction
10. Offer employees additional benefits instead of raises or bonuses
For Individuals
1. Donate items, including appreciated stock, to charity or make a charitable cash
contribution (get a receipt for your donation)
2. Discover credits for childcare costs (daycares and sitters)
3. Check if you qualify for the Earned Income Credit
4. Discover the tax credits for replacing energy saving windows, insulation or HVAC systems
5. Take any stock losses to offset any gains and deduct up to $3000
6. Track medical receipts and premium payments
7. Give away money (yes, give it away!) up to $14,000 to an individual
8. File on time – avoid penalties (ask for an exception if you are late; the penalty can
be waived once)
9. Use a credit card to pay deductible expenses before year-end in 2015, but write
the check in 2016
10. Consider applying a “something” strategy to your itemized deductions if your expenses
typically are close to the standard deduction threshold.
We're ready to help you find your "10 Simple Things." Contact hkass@zinnerco.com or any member of the tax team to learn more.