For some of you, this article is too late, but perhaps it will help fellow delayers. The Wall Street Journal had an article in their February 2, 2015 edition that highlights some of the things to watch for when filing your return this year. First, get ready for extra lines on the 1040 because of Obamacare. Many of you will simply check a box verifying that you have coverage. Some of you will be eligible to claim an exemption. Those that don’t meet either criteria will have to make an “individual shared responsibility payment”. Another possibility is qualifying for “premium tax credits”. This could be complicated, so don’t hesitate to consult with a qualified tax advisor. Another area to watch is overpayment of social security tax. If you worked for more than one employer, there is a chance that too much was paid in to the system. The max that should have been withheld is $7,254. If you gave too much, you can claim the excess as a credit on your tax return.
Losses on stocks, bonds or other investments in excess of gains can be deducted up to $3,000, if married, filing jointly. Any losses in excess of $3,000 can be carried over to future years. Losses on the sale of your personal home do not count. If you take advantage of the rule allowing transfers from your IRA to a charity, you have to report the transfer on your tax return even if it is tax free. It goes on line 15(a) of your 1040. Print “QCD” next to the entry. Before going to the trouble of itemizing your deductions, note that the standard deduction for married filing jointly taxpayers is $12,400. If you do itemize, remember that you have a choice of deducting state and local income taxes or state and local sales taxes. If you made major purchases in 2014, you should compare before repeating what was done before. Finally, if you work from home, the rules on home office expenses have been simplified. Multiply the square footage of your office by $5.00 up to a maximum of 300 square feet. Again, review the specifics of any of these items with your tax accountant to make sure of the application to your individual circumstances.
Our Ash Wednesday service ended with this hymn from the late 19th or early 20th century: “Before thy throne, O God, we kneel; give us a conscience quick to feel, a ready mind to understand the meaning of thy chastening hand; whate’er the pain and shame may be, bring us O Father, nearer to thee. Search out our hearts and make us true; help us to give to all their due. From love of pleasure, lust of gold, from sins which make the heart grow cold, wean us and train us with thy rod; teach us to know our faults, O God. Let the fierce fires which burn and try, our inmost spirits purify; consume the ill; purge out the shame; O God, be with us in the flame; a newborn people may we rise, more pure, more true, more nobly wise.” A bit dated, a bit stern, but, after all, it is a season of preparation and inspection. And never fear, I let Beverly sing the hymn, to the joy of all those around us. I stayed quiet.
Although this information has been gathered from sources believed to be reliable, it cannot be guaranteed. This material is intended for informational purposes only and should not be construed or acted upon as individualized tax, legal or investment advice. FSC Securities Corp does not offer tax or legal advice. Securities, insurance and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment advisor 3416 North Blvd, Alexandria, LA 71301, (318) 448-3201. The views expressed are not necessarily the opinion of FSC Securities Corporation.