1. Business Automobile Mileage
The standard mileage rate for business miles is $0.575 cents per mile.
2. Other Mileage Deductions
You may deduct $0.14 cents per mile for charitable activities, & $0.235 cents per mile for medical or moving purposes. Parking fees and tolls are also deductible.
3. Business Equipment
Businesses can expense up to $25,000 for their equipment purchased instead of depreciating the costs
4. Capital Gains
For 2013 & forward the maximum tax rate for gains from capital assets sales is 15% (0% in case of 15% tax bracket & 20% in case of 39.6 tax bracket) for assets held more than 1 year.
5. Auto Depreciation Limits
Maximum depreciation limits are:
year 1 - $3,160
year 2 - $5,100
year 3 - $3,050
year 4+ - $1,875
There is also a $25,000 179 deduction for SUV > 6,000 lb.
2015 Tax Law Update
We exist to make your life easier! Check out this brief summary of the changes made to federal tax law in 2015.
10. IRAs (Traditional)
For 2014 & 2015, you may contribute up to $5,500 ($6,500 for 50 or older) to a traditional IRA. The deductible contributions are limited for individuals that are active participants in a retirement plan maintained by the employer (phased out between $96,000-$116,000 (MFJ)($98k/$118k in 2015), $60,000-$70,000 (Single)($61K/$71K in 2014). If only one spouse is covered, the phase-out is between $181,000 and $191,000 ($183k/$193k in 2015).
11. IRAs (Roth)
You may contribute up to $5,500 in 2014 & 2015 ($6,500 if you are 50 or older) to a non-deductible yet tax-free IRA. Phase out rules apply for higher incomes over $181,000 – $191,000 (MFJ) ($183k/$193k in 2015), $114,000-$129,000 (Single) ($116k/$131k in 2015) $0 - $10K (MFS).
12. IRA Parity for Non-working spouses
Married couples with only one wage earner may now contribute up to $11,000 ($5,500 each) into 2 IRA accounts. Some limitations. Phase-out is between $181,000 to $191,000 joint income ($183k/$193k in 2015) for spouse not in a plan to contribute.
13. Personal Exemptions
Personal exemptions = $3,950 per dependent ($4,000 in 2014). There is a phaseout (2% for each $2.5K (1.25K MFS) over threshold) in 2014 for incomes over $305k (MFJ), $254K (Single).
14. Self-employed Health Insurance Deductions
As a self-employed individual, you may now deduct 100% of your 2013 health insurance premiums.
15. Social Security Taxes
Employees paid 6.2% on the first $117,000 of 2014 earned wages ($118.5K 2015). Medicare (1.45%) has no ceiling. In 2014, there is a.9% high-earner Medicare surtax for earned income over $250k (MFJ), $200K (Single), $125K (MFS). Also, a 3.8% Med. tax on lesser of NIV or excess of MAGI over threshold.
16. Standard Deductions
The standard deduction for married individuals has been increased to $12,400 MFJ/$6,200 Single ($12,600 ($6,300 for Single filers) in 2015). For dependents claimed on another’s return in 2014, it has increased to $1,000 or $350 plus any earned income up to $6,200.
Itemized Deductions – Phase-out on lesser of 3% of AGI over $305,050 MFJ, $254,200 Single or 80% of net I.D.
6. Child Tax Credit
You may now receive a $1,000 tax credit for each qualifying child that is under 17, a dependent, a direct descendant, or foster child (refundable credit through 2017). Phase out rules apply for higher incomes over $110,000 (MFJ), $75,000 (Single), $55,000 (MFS).
7. College Education Credit and Deductions
You may receive a credit for higher education costs (American Opportunity and Lifetime Learning Credits). Even some interest paid on education loans may be deductible. Phase out rules apply for incomes over $160,000-$180,000 (MFJ) and $80,000- $90,000 (Single filers). The Lifetime Credit allows up to $2,000 (20% of the first $10,000 per taxpayer). It phases out between $108,000 - $128,000 (MFJ) and between $54,000 - $64,000 (Single).
8. Estate and Gift Taxes
In 2014, you may pay no estate taxes at $5,340,000 in value (paying 40% tax on excess) In 2014 & 2015, you may give gifts up to $14,000 per year per person to reduce your estate.
The maximum contribution to a 401(k) retirement plan for 2014 & 2015 is $18,000 ($24,000 if born before 1964, 50 or older).
10. Simple IRAs
The maximum contribution is $12,000 for 2014, $12,500 for 2015 ($14,500/$15,500 for those 50 or older).
Most taxpayers that only report wages on a W-2 without itemizing, will will owe little or no money if they claim only one allowance.
To maximize your refund, claim no allowances and withhold at the higher single rate even if you are married