January 2016 Tax Tips

  • 2
  • Check your withholding for 2016. If you’re having too much or too little withheld, file a new Form W-4 with your employer to bring your withholding closer to your ultimate 2016 tax liability.
  • Be sure you have social security numbers for all dependents you intend to claim on your 2015 tax return. If you still need a number, contact the Social Security Administration.
  • Get your recordkeeping organized for 2016 to make it easier to keep track of all potentially deductible items this year.
  • Check your records to be sure you have the paperwork you need for charitable contributions you want to deduct on your 2015 tax return. Reminder: Cash, check, and other monetary donations of any amount can be deducted only if substantiated by a bank record or written documentation from the charity.
  • As you gather information you’ll need to file your 2015 tax return, don’t overlook tax breaks that could cut your tax bill. Among them:
  • You can contribute $5,500 to an IRA for 2015, plus an extra $1,000 if you’re 50 years old or older. If you didn’t reach that limit during 2015, designate your pre-April 15, 2016, IRA contributions as being for 2015 until you reach the limit.
  • If you work and pay for child care, you may be eligible for the child care credit. Also, your employer may allow you to set aside part of your salary tax-free to pay for child care expenses. You may even be eligible for the earned income credit. And don’t overlook the child tax credit for children under age 17.
  • If you provide over half the support of your parent and meet certain other requirements, you may be eligible to claim a dependency exemption. If you’re single and supporting your parent, you may qualify for head of household filing status even if your parent doesn’t live with you.

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.



All stories by: speakeasy

Comments are closed.