End of the Year and Things to Think About...Besides Turkey

Best wishes from MAHKENGINE to you for a wonderful holiday season ahead!  Hard to believe that 2015 is coming to a close.

Between now and the end of the year, it is important to take a little time (in between the various work, social, and family gatherings) to evaluate your accounting and tax situation.  Yes, I hear the voices in your head that are saying I don't want to worry about that now.  However, by evaluating a few areas, you may be able to take advantage of some year end deductions and strategies to help reduce your 2015 tax liability.

Charitable giving: Make sure to mail your year end gifts or pay online before 12/31 to your favorite charity or your church.  Included in here are also the tax credit payments to public or private schools (Arizona taxpayers).  These payments will be an itemized deduction on your Federal return and a credit for your state return.


Contributions to retirement:  if you are self-employed, you can make a SEP contribution for 2015 by the due date of your returns (April 15 or October 15 if extended).  Start thinking now, so there is time to set aside available funds.  Your allowable contributions will reduce taxable income.
 

Capital gains/losses:  If you have sold some stocks, mutual funds, or other assets during the year at a gain, now might be the time to see if you have any losses to recognize before year end to help offset any gains.

Businesses owners:  Evaluate if there are expenses, equipment or other asset needs for your business.  Before year end is a good time to make these purchases to be able deduct them for 2015.

Ready for a new accounting system?  If you have been wanting to improve your accounting system, now is the time to get this set up so you are ready to go come January 1 with a new system.  Or, maybe your 2015 accounting records need some help to be tax ready for you or your tax preparer to be able to prepare for taxes.  Contact us and we can help you with a data conversion to Xero, get you organized for taxes, and start 2016 with an efficient system.

 

 

College expenses and the IRS

September is here and school is now in full swing around the country.  Many post high school students as well as adults are returning to the college campuses.  It is a busy time of getting tuition, fees, and books purchased and starting new routines.  Now that these tuition payments are fresh in your mind, and prior to the end of the year, help yourself by organizing your 2015 education information prior to tax time.  Come January, you should be receiving Form 1098-T from each educational institution attended, which you will need to compute your potential tax credits.

Recently, the IRS is starting to adjust or deny educational tax credits as a result of how colleges and universities are reporting tuition on the annual 1098-T forms.  When you receive a 1098-T with an amount listed in Box 1 for tuition payments received, the IRS is relying on that information and filing is smooth.  However, I am seeing more and more 1098-Ts with an amount in Box 2 for amounts billed for qualified tuition and fees.  When the IRS receives this information, they are then looking to the taxpayer to be able to provide proof of tuition/fee payments by direct payment, loan payments, grants, etc.  Going forward this will need to be provided to the IRS with the filed returns.

Therefore, while this topic is fresh in your mind, take the time to gather the following information for any dependent, yourself, or your spouse that is attending college on a part-time or full-time basis:

  • Statements from the educational institution for any 2015 tuition assessed and detail of your payments made in 2015.  Also include any required fees, books, as some credits allow for these expenses.
  • Separate this information by each student in your household.
  • Indicate if these expenses are for a student in their first four years of college.

May you all have a great start to the fall season!  

Michele

 

 

 

Change

Change can be scary...yet without change we fail to grow.  My mother used to tell me that challenges and change build character.  Years ago during one of those times I looked at her and said “I have enough character...I think I am done for a while.”  We both laughed, but with a positive attitude, my personal network, and my financial knowledge, I persevered and found new options for my family.  Sometimes it is easier to maintain the status quo...it is known and predictable.  But, is that the best solution?

 

Are you, your family, or your business in a time of change? Is it positive changes such as a new job, launching children to college, marriage, retiring, or starting a new business?  Is it a personal challenge such as divorce, death of a loved one, medical struggles?  Many of these times also come with financial and tax ramifications.  During these times it is helpful to have a professional on your side that can guide you and teach you how to roll with these changes, whether exciting or trying.  

 

We are excited to share our new MAHKENGINE blog, where we will explore various topics and share knowledge you can benefit from.  If you have a topic you want us to address, email michele@mahkengine.com and we will add it to our list.


 

Excited to connect with you!

 

Michele