Year End Tax Tips

Thursday, December 18, 2014 | Leave a comment

Year End Tax Tips

Christmas is right around the corner.   I am sure most people are working a list and checking it twice to be sure all of their loved ones have the gifts they desire underneath the Christmas tree.  Often times we over look the fact that one week later marks the end of the year.  Personally, it does not seem possible that 2014 is all ready coming to an end.  As we approach year end you may have an interest in reviewing some last minute tax tips. If you would like some additional information please contact our office for a no charge consultation.  Keep in mind all of these tips have to have a receipt or cancelled check that shows a date of between January 1 – December 31, 2014.

1.  Donate to your favorite Charity – The holidays provide a good opportunity to clean out your closets and make deductible charitable gifts. Goodwill, Salvation Army, men’s and women’s shelters are a few of the most popular places to donate slightly worn cloths, toys and furniture. Depending on where you live there may be opportunities to donate to a local Christmas Charity that helps out those who may not be as fortunate. All of these outlets will provide receipts for your taxes. If you have cleaned out your closets and still would like to donate you can always make a monetary donation of cash or stock to a nonprofit organization of your choice.

2.  Do you have children or grand children? If so you may want to consider opening up or contributing to a 529 college savings plan. The current IRS rules allow you to contribute up to $14,000.00 per beneficiary per year. A married couple can contribute up to $28,000.00 without incurring a gift tax. Many states also allow this tax deduction

3.  Make a Tax Free Gift – As a wealth transfer strategy, this year you can give up to $14,000.00 annually of $28,000.00 as a married couple to as many individuals as you would like. You would not face federal gift taxes. Your heirs will not pay estate taxes on these funds.

4.  Maximize your 401K contribution. If you’re under 50 years old you can have as much as $17,500.00 taken from your pay check per year as a 401K contribution. Anyone above 50 the IRS allow a maximum of $23,000.00 per year to be set aside on a pre – tax basis. This will reduce your taxable income and your take home pay.

** Often times during the holiday’s life slows down a little and is an opportunity to review your financial portfolio.  If you have an old 401K/403B with a former employer it may be a good time to consider some transfer options

5.  Consider a Roth IRA Conversion – Roth IRA’s are very popular and its main advantage is the tax structure. If you have a 401K and you desire to convert a portion of it to a Roth then as long as the transaction is completed prior to year end you can absorb the income tax in this calendar year. If you’re under 50 years old the maximum contribution is $5,500.00 per year. Above 50 you can maximum limit is $6,500.00. If you presently have a Roth IRA you can contribute to it on a yearly basis. If you’re not receiving the return you were hoping for, you can transfer your account to another financial institution or insurance company and will not count as a contribution for 2014. Are you aware that a contribution can be made for 2014 all the way up to April 15th of 2015?

6.  Are You Self Employed? – Under IRS guidelines if your self employed you can establish a Self Employed Pension. The maximum contribution to a SEP IRA is 20% of a person’s net self-employed income with a maximum limit of $53,000.00. Net Self Employed Income is employed Income minus one half of the self employment tax. A SEP can be established and funded as late as October 15th for the previous year. Providing you have filed an extension with the IRS

7.    Deductible Expenses – If you think you’ll need more deductions this year than next consider paying future expenses prior to December 31st. If you make a mortgage payment early you can deduct the interest in the present calendar year. You can do the same with future business expenses, charitable donations or estimated state and federal income taxes for next year.

John CasaSanta has been protecting families’ assets and providing life/health insurance for 21 years. CasaSanta Financial Services was established in 2003 with the sole purpose of assisting families in reaching their financial goals. John can be reached by e-mail: or at (704) 451-7020. You can learn more about John at


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