- If you don’t have an IRA (individual retirement account) and you qualify for a deductible one, setting one up and making a contribution before the April 18 deadline can cut your 2015 taxes. Be sure to make clear to your bank or broker that the contribution is for 2015 even though you’re making it in 2016.
- Review your children’s 2015 tax filing requirements. If your child had wage income only during 2015, a tax return is required if wages exceeded $6,300. If the child earned less than $6,300 but employers withheld taxes, a tax return must be filed if you want a refund.
If your child had net self-employment earnings of $400 or more in 2015, a return is required and a self-employment tax is due. Income tax could be due if earnings exceeded $6,300.
If your child had investment income only during 2015 (such as dividends and interest), filing is required if the total exceeded $1,050.
If your child had both earned and investment income, a return is required if the total was more than the larger of (a) $1,050 or (b) earned income plus $350 (up to $6,300).
- Don’t let any tax credits slip through the cracks. A tax credit is a dollar-for-dollar reduction in your tax bill. The benefit that you derive from a tax deduction depends on your bracket. Therefore, a credit is always more valuable than a deduction. If you incur any expenses for education or child care, it can be especially important to plan for potential credits.
- If you can’t file your tax return by the April 18 deadline, use Form 4868 to give you up to six additional months to complete your return. Even if you have no problem filing by April 18, getting an extension might be a good idea in certain situations. It extends the time for some pension contributions, for example. Be aware, however, that Form 4868 extends only your filing deadline; it does not give you more time to pay taxes due.
The information on this site is general in nature and should not be acted upon in your particular situation without further details and/or professional advice. For assistance, contact our office.