Self employed individuals can also claim the following above-the-line tax deductions half of self-employment tax, health insurance premiums and contributions to SEPs and SIMPLE plans. They may include student loan interest, tuition and fees, moving expenses, paid alimony, military reservists deduction, traditional IRA contributions and contributions to health savings accounts. Ask your tax preparer about above-the-line deductions to ensure you qualify.
FOUR RULES OF THE ART OF DEDUCTION PROFESSIONAL
These deductions include business liability insurance, vehicle expenses, home office expenses, advertising expenses, legal services, professional services, and compensation paid as a result of the business. These deductions are claimed on the business Schedule C (or Schedule F for farmers, Schedule E for rental property). Schedule C deductions – Business owners can claim additional deductions relating to their business.Other deductions that are popular among itemizers yet still overlooked by many taxpayers include certain medical expenses, state and local income taxes, charitable contributions, casualty losses, out-of-pocket job expenses that are not reimbursed and dozens of miscellaneous expenses. People who have purchased a home can deduct interest, mortgage insurance premiums and real estate tax. Itemized tax deductions– In some cases, itemized tax deductions can result in more savings than taking the easy route with the standard deduction.Most taxpayers opt for the standard deduction unless additional savings can be realized through other deductions. For 2010, the standard deduction remains unchanged from 2009 with the exception of a $50 increase for those filing Head of Household. This is a fixed amount that is based on the filing status. According to the United States tax law, the standard deduction is the dollar amount that individuals who chose not to itemize may deduct from their income. Standard tax deduction – For many taxpayers, the standard deduction is the simplest and most convenient deduction to take when filing their tax return.The donation counts as part of your required minimum distribution.įor more tax breaks related to IRAs and other retirement plans, contact our office. While it’s too late to make a contribution for 2015, you can exclude direct transfers of up to $100,000 from your gross income this year. The age of 70½ also lets you benefit from the now-permanent tax break for making charitable contributions from your IRAs.
That’s the last day you have to take your initial distribution or you’ll be subject to a 50% penalty on the amount you should have taken. If you chose to delay taking your first distribution last year, April 1, 2016, is an important deadline. If you turned 70½ in 2015, you’re now required to take an annual minimum distribution from your IRA (and, unless you’re still working, from other retirement plans also).You also have the opportunity to “reconvert” the funds to a Roth again after a recharacterization. If your circumstances change, you can choose to “recharacterize” your new Roth as a traditional IRA by moving the funds back within a specified period. Although a conversion now will generate taxable income that’s reportable on next year’s federal tax return, qualifying withdrawals from the Roth will be tax-free when you retire. You can make a contribution to a traditional IRA and convert it to a Roth later.If you were 50 or older by December 31, 2015, you can contribute up to $6,500. If you’re under age 50, the maximum contribution is $5,500. If the IRA is the traditional, tax-deductible kind, you can deduct that contribution on your 2015 federal income tax return. Under current tax rules, you can establish and contribute to your IRA up until Ap(April 19 if you live in Maine or Massachusetts). Are you searching for one more tax deduction? It’s not too late to contribute to your IRA and claim a deduction for 2015.Here are four to remember as you prepare your 2015 federal income tax return. If you have an individual retirement account, you’re aware of how complicated the rules can get.
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