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Message
2015 Tax Planning Questions
Posted on 4/15/15 at 2:38 pm
Posted on 4/15/15 at 2:38 pm
Need some directions to reduce my tax liability for 2015.
2013 AGI: 91064
2014 AGI: 107254
2013 Tax Owed: 1393
2014 Tax Owed: 5186
Needless to say I was a little caught off guard with my 2014 Tax bill. Yes AGI is up approx 15k, but did not expect tax liability to rise almost 4k.
Thanks
2013 AGI: 91064
2014 AGI: 107254
2013 Tax Owed: 1393
2014 Tax Owed: 5186
Needless to say I was a little caught off guard with my 2014 Tax bill. Yes AGI is up approx 15k, but did not expect tax liability to rise almost 4k.
Thanks
4
Posted on 4/15/15 at 2:42 pm to ThatsAFactJack
What are you claiming?
Posted on 4/15/15 at 2:43 pm to ThatsAFactJack
What were your withholdings for both of those years?
Posted on 4/15/15 at 2:58 pm to SLafourche07
quote:
What are you claiming?
3
Married with 1 child
Posted on 4/15/15 at 3:00 pm to Brummy
quote:
What were your withholdings for both of those years?
2013 Withheld: 2871
2014 Withheld: 5608
2013 Total Tax: 4264
2014 Total Tax: 10794
2013 Itemized Ded: 13200
2014 Itemized Ded: 12702 (less mortg interest)
Posted on 4/15/15 at 3:44 pm to ThatsAFactJack
$15k of income @ 25% marginal rate is $3,750 of additional tax. You shouldn't have been too shocked. The only permanent discretionary deductions are charitable contributions. All other discretionary deductions are timing deductions. You can accelerate, or defer, them to maximize your benefit on one year at the expense of another. If you do this it is recommended you do it with expenses that are subject to AGI limitations, medical expenses are the classic example.
Posted on 4/15/15 at 5:49 pm to ThatsAFactJack
Both are pretty low numbers IMO. You are doing relatively well in terms of how much tax you are paying.
Posted on 4/15/15 at 8:19 pm to Poodlebrain
Poodle beat me to it. Given marginal rates that's not out of question.
Poodle, how were you able to post at 3:30 today? I just wrapped up about an hour ago!
Poodle, how were you able to post at 3:30 today? I just wrapped up about an hour ago!
Posted on 4/15/15 at 9:25 pm to LSUFanHouston
Almost 30 years of practice, and the independence to dictate to my clients whether their returns were going to be finished or extended as of Monday. That gave me yesterday to handle administrative details, and today I just sat around answering silly phone calls and doing serious things on the internet.
When I worked for Arthur Andersen several decades ago, we had a 10 day rule for April 15th. Returns had to be delivered to clients 10 days before April 15th, or they would be extended so that mistakes weren't made out of haste and the clients had adequate time to review the returns and have any corrections made. I just apply a similar policy to my practice.
When I worked for Arthur Andersen several decades ago, we had a 10 day rule for April 15th. Returns had to be delivered to clients 10 days before April 15th, or they would be extended so that mistakes weren't made out of haste and the clients had adequate time to review the returns and have any corrections made. I just apply a similar policy to my practice.
Posted on 4/16/15 at 8:01 am to Poodlebrain
quote:
Poodlebrain
Should I bump up my 401k contributions to lower my AGI? Should I claim single to increase my withholdings and lower my end of year tax bill? Any suggestions appreciated so I am not paying 5k again next year. And yes you are correct I should not have been shocked, I think I am more shocked my AGI had increased that much. Normally my income rises at 3-5%.
Posted on 4/16/15 at 8:28 am to ThatsAFactJack
quote:That is generally a wise thing to do. Saving every penny in excess of your routine cash flow requirements is never a bad idea. Every additional dollar you set aside results in $.25 less tax. So, you are getting an immediate 25% return on your investment.
Should I bump up my 401k contributions to lower my AGI?
quote:For the most part this will only change when you pay the tax, not how much tax you pay. The change in state income tax withheld is what will lower your federal tax liability slightly. The deduction for state income taxes paid will increase by the increase in state withholding.
Should I claim single to increase my withholdings and lower my end of year tax bill?
Posted on 4/16/15 at 9:04 am to Poodlebrain
Hey Poodle,
It looks like this year I am going use itemized deductions. I have been looking at the IRS website to try and find a list of all the deductions but can't find anything. I imagine they make it complicated on purpose?
I want to make sure I am keeping up with my paperwork throughout the year.
It looks like this year I am going use itemized deductions. I have been looking at the IRS website to try and find a list of all the deductions but can't find anything. I imagine they make it complicated on purpose?
I want to make sure I am keeping up with my paperwork throughout the year. Posted on 4/16/15 at 9:31 am to Azazello
The big ones are:
1 - mortgage interest
2 - state income tax
3 - real estate taxes
4 - charitable contributions
5 - unreimbursed business expenses if you are required to travel and no mileage reimbursements
6 - investment expenses
There are others but those are the main ones that push people to file schedule a.
1 - mortgage interest
2 - state income tax
3 - real estate taxes
4 - charitable contributions
5 - unreimbursed business expenses if you are required to travel and no mileage reimbursements
6 - investment expenses
There are others but those are the main ones that push people to file schedule a.
Posted on 4/16/15 at 1:43 pm to Poodlebrain
quote:
Almost 30 years of practice, and the independence to dictate to my clients whether their returns were going to be finished or extended as of Monday. That gave me yesterday to handle administrative details, and today I just sat around answering silly phone calls and doing serious things on the internet.
When I worked for Arthur Andersen several decades ago, we had a 10 day rule for April 15th. Returns had to be delivered to clients 10 days before April 15th, or they would be extended so that mistakes weren't made out of haste and the clients had adequate time to review the returns and have any corrections made. I just apply a similar policy to my practice.
You give a lot of us younger CPAs a lot of hope. Most of the CPAs I know with your level of experience seem to think 18 hour days right before the deadline are a badge of honor. Glad to know that there is at least one "older" CPA who thinks differently.
Posted on 4/16/15 at 2:00 pm to ThatsAFactJack
quote:
Should I bump up my 401k contributions to lower my AGI? Should I claim single to increase my withholdings and lower my end of year tax bill? Any suggestions appreciated so I am not paying 5k again next year. And yes you are correct I should not have been shocked, I think I am more shocked my AGI had increased that much. Normally my income rises at 3-5%.
Of course bumping the 401K will help. And so will a traditional IRA...this is the "last resort" method we use. Figure out your monthly retirement/401K contribution, make your predetermined contributions all year. Then at tax time, if you owe, kick the max into your trad IRA at the last minute...in esence, pay yourself before you pay the gov't. (Note that the traditional IRA deduction limits vary according to filing status and income levels.)
Posted on 4/16/15 at 3:28 pm to LSUFanHouston
quote:Most of the more experienced CPAs I know think having their staff work 18 hour days up to deadlines is a badge of honor. The experienced guys are just managing the process and communicating with clients. They only work about 10 hours per day.
Most of the CPAs I know with your level of experience seem to think 18 hour days right before the deadline are a badge of honor.
Posted on 4/17/15 at 7:01 am to Poodlebrain
This is the exact thing we do in my office. I was only in the office for 2 hours on Wednesday. Finished my last 1040 at 1030 on Tuesday morning.
Nothing good can come of rushing to finish returns that get brought in at the last minute. Just asking for mistakes, IMO.
Nothing good can come of rushing to finish returns that get brought in at the last minute. Just asking for mistakes, IMO.
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