During December, you should evaluate whether you’ll save any taxes by postponing 2014 income or deductions into 2015 or by accelerating 2015 income or deductions into 2014. While many factors should be evaluated prior to making your final decision, a few items to keep in mind are as follows:
- For 2014, a single person will itemize once allowable deductions exceed $6,200 and a married couple will itemize once allowable deductions exceed $12,400.
- A taxpayer is no longer subject to Social Security or self-employment taxes once wages and net self-employment earnings exceed $117,000 in 2014 and $118,500 in 2015.
- Miscellaneous itemized deductions, such as unreimbursed employee business expenses, are only deductible to the extent they exceed 2% of adjusted gross income (AGI). Items paid with credit cards are deductible in the year charged.
- Medical and dental expenses are deductible to the extent they exceed 10% of AGI, and are deductible in the year paid.
If you need assistance in determining whether you should either postpone or accelerate your income or deductions, or whether you’ll be hit by the Alternative Minimum Tax (AMT), please give us a call.