1.
By combining personal and business travel you have to opportunity to deduct the travel expenses. You can deduct the cost of travel, lodging and 50% of meals and entertainment. Business needs to be the primary purpose of the trip. That means more days have to include a business activity than not. You can only deduct your spouse’s expenses if there is a bona fide business purpose for the spouse’s presence and the spouse is an employee of the business.
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2.
If you send your children to summer camp or pay to have someone take care of your children while you are working or looking for work these expenses count towards the dependent and childcare credit. Overnight camps do not qualify. For married and filing jointly couples, your spouse must also be working, looking or work, a full time student or disabled to qualify.
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3.
If you receive a large refund each year, you should consider revising your W-4 form with your employer. Having too much withheld from your paycheck is like giving the IRS a tax free loan for the year. Adjust your withholdings so you take home more each paycheck. You can set up a savings account and have the funds that were going to the IRS automatically transferred to savings for you. This way you can access them anytime during the year.
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4.
There are certain deductions that may be disallowed if you cannot provide proof. They include charitable contributions, gambling losses, vehicle costs, and travel and entertainment expenses. Those little slips of paper given to you when you drop off your donations may seem unimportant. But they IRS will want to see them if you are audited. Start an envelope for all your tax information and drop those receipts in there as they happen. This way you are not searching for all those slips when it’s time to visit your tax preparer.
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5.
The contributions you make towards your retirement plan for the year reduce your current year taxable income. The maximum you are allowed to contribute in 2014 to a 401(k) is $17,500. If you are 50 or older this year you can contribute and additional $5,500. If you have the ability to contribute the maximum amount you should take advantage of that tax break each year.
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Patricia Anderson, EA, founder and owner of P.T. Anderson, Inc., serves the tax, QuickBooks, and accounting needs of individuals and small businesses in Palm Beach and Broward Counties. She is a graduate of the University of Florida with degrees in Finance, Real Estate, and Economics. She is an Enrolled Agent, empowered by the US Dept. of Treasury to represent taxpayers before all administrative levels of the IRS for audits, collections, and appeals. Additionally, she is a certified QuickBooks ProAdvisor providing QuickBooks expertise. "At P.T. Anderson, Inc., we view every client relationship like a partnership, and truly believe that our success is a result of your success."For more information on this topic and other tax planning solutions, contact Patricia T. Anderson, EA at [email protected].
Summertime Tax Planning
by
Patricia T. Anderson, EA
The laid back days of summer are here. Our thoughts are on vacations, beaches, and a more relaxed way of life. If you already filed your 2013 tax return, you most likely are not even thinking about taxes at this time of the year; however summer is really the best time to start your tax planning. Half the year has passed. You have 6 months of income and a better idea of what your income will be for the rest of the year. If you make changes now, there is still substantial time to make a difference. Make an appointment with your tax preparer to meet you at the beach to discuss the following areas: