During December, you should evaluate whether you’ll save any taxes by postponing 2015 income or deductions into 2016 or by accelerating 2016 income or deductions into 2015.? While many factors should be evaluated prior to making your final decision, a few items to keep in mind are as follows:
- For 2015, a single person will itemize once allowable deductions exceed $6,300 and a married couple will itemize once allowable deductions exceed $12,600.
- A taxpayer is no longer subject to Social Security or self-employment taxes once wages and net self-employment earnings exceed $118,500 in 2015 and 2016.
- Miscellaneous itemized deductions, such as unreimbursed employee business expenses, are only deductible to the extent they exceed 2% of adjusted gross income (AGI), and are phased out if you?re subject to the AMT. 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 AMT, please give us a call.