Paying The Piper

Getting Ready to File your Taxes?  Here are a few things you should know when filing your 2014 tax returns.
If you own assets such as a business, real estate or investments, it is recommended you hire an accountant to maximize your savings when filing your tax returns.  A Certified Public Accountant will help you identify the changes in tax policy that occur annually.  The software they use typically
has the latest tax regulations and codes.  A saavy tax preparer can usually find deductions you wouldn’t normally be aware of.  Here are a few tax tips that can save you money.
Retirement Accounts
If your current employer doesn’t have a 401 K plan you can put money aside in a traditional IRA or a Roth IRA.  In 2014, the contribution limit for both the traditional and the Roth IRA is $5,500 for most people.  If you are over 50 years of age, you can contribute up to $6,500 to your IRA account.  In 2015, the limits will be the same.  Coughing up that amount in one lump sum can be daunting, so it is recommended that you set aside a set amount each paycheck to accumulate the amount you can easily manage.
Save Money For Education
A Section 529 plan is a Qualified Tuition Program which allows you to invest money in a tax preferential way for college savings. New York State will still be offering the New York State College
Choice Tuition Savings Program. This will allow you to contribute up to $5,000 per person per year for your children’s education (that makes it up to $10,000 for
a married couple), and take a deduction for it from your New York State tax return.
You can contribute more than $5,000 annually; you just don’t get a deduction for the excess.
Charitable Donations
You must have proof of all charitable deductions taken on your tax return by the due date of that tax return. Cancelled checks and receipts are acceptable documentation for cumulative donations of less than $250 per year. If your donation to any
individual charity is higher than that, you will need a letter from the charity verifying that donation.
Mortgage Interest Deduction
Very important if you own your own home. Mortgage interest is deductible on the first $1,000,000 of debt on your property as long as that debt was used to buy or improve your home (acquisition debt). You can also deduct qualified home equity interest on an additional $100,000. Mortgage loans that are used for things other than the purchase or improvement of your home (home equity debt) is limited to debt on up to $100,000 for regular tax, but is not deductible at all for the AMT (alternative minimum tax).
When all is said and done at the end of the day, make sure you file your taxes on time.  If you do not have all the tax documents available, it is highly recommended you file for an extension.