If you have a health flexible spending account (FSA) with a balance, remember to spend it before year end (unless your employer allows you to go until March 15, 2015, in which case you’ll have until then).
If you own a vacation home that you rented out, we need to look at the number of days it was used for business versus pleasure to see if there is anything we can do to maximize tax savings with respect to that property. For example, if you spent less than 14 days at the home, it may make sense to spend a few more days and have the house qualify as a second residence, with the interest being deductible. For a rental home, rental expenses, including interest, are limited to rental income.
We should also consider if there is any income that could be shifted to a child so that the income is paid at the child’s rate.
If you have any foreign assets, there are reporting and filing requirements with respect to those assets. Noncompliance carries stiff penalties.
LIFE CYCLE CHANGES IMPORTANT TO YEAR-END STRATEGIES
In addition to changes in the tax law, year-end tax strategies should also consider personal circumstances that changed during 2014, as well as what may change in 2015.
- Change in filing status: marriage, divorce, death or head of household changes
- Birth of a child
- Child is no longer young enough for child credit
- Child who has outgrown the “Kiddie” tax
- Casualty losses
- Changes in medical expenses
- College and other tuition expenses
- Employment changes
- Personal bankruptcy
- Large inheritance
- Business successes or failures
GIVE US A CALL
Do you have any questions regarding year-end tax planning or your individual tax situation? Please do not hesitate to contact us: (508) 830-0007 http://www.cozbycompany.com.