With just a few days left before the close of 2014, there are still chances to save on your upcoming tax bill. Cindy Meicher Hasenfratz, CPA, CVA and partner at Meicher CPAs, offers the following suggestions for preserving your income:
Clean out your closets
If you itemize, now is the time to make some trips to Goodwill, Salvation Army or your favorite charity. Make a list of each item you donate, get a dated receipt, and you can deduct the fair market value of each item (their value may surprise you). You can claim up to $5000 worth of items without requiring an appraisal. The bonus- you’ll have cleaner closets!
Give, especially appreciated stock
You can also donate financially to your charity of choice. Gifts of appreciated stock provide the most value to you, and your charity. If you’ve owned the stock for more than one year, you can deduct its fair market value, and your charity can sell it, all without being taxed. Conversely, selling it first will cost you tax, a lower deduction, and will result in a lower value for your charity.
Evaluate your deductible expenses
Take a look at your mileage, both charitable and business related. Both are deductible- charitable at 14 cents/mile, and business mileage is valued at 56 cents/mile. If you’re self-employed, or your work is based out of your home, you can consider other business expenses, possibly your phone, internet, utilities and your homeowner’s insurance. Each of these potential deductions can make a difference to your tax burden.
Consider your future income possibilities
Of course, all last minute deductions should be weighed against your potential income for 2015. If you expect to be in a higher tax bracket next year, it is better to wait, and save your donations for next year.
Meicher CPAs, LLP works with businesses and individuals desiring the least possible tax coupled with an understanding of personal wealth accumulation. For more information, visit their website.
