Now that we’re really down to the wire, it’s time to start crunching those numbers! You’ve have a little bit longer this year, Individual Tax Returns are due on April 18th, but you may want to take the weekend to make sure you’re taking advantage of all the deductions available to you. Lower your tax liability and avoid IRS scrutiny with some of these last minute tips.
1. Did you know you could deduct the cost of your 2015 Startup?
As long as your costs fall below the $50,000 mark, you could deduct up to $10,000 of your taxable income. Up to $5,000 for research, development and creation of your business and $5,000 for the implementation costs such as incorporating, patenting, and legal fees. Research costs spent improving your product or service are considered eligible expenses as well.
What doesn’t count:
-Advertising
-Promotions
-Quality control testing
-Consumer Surveys
2. Did you know that the threshold for big company purchases has been raised?
If you’ve purchased expensive equipment last year for your business, this year you can deduct up to $500,000 as long as your total eligible property costs are less than $2 million. This can include big items like a new walk-in refrigerator for restaurants, or furniture for your office space, even computer programs.
What doesn’t count:
- Improvements on rental properties
- Air conditioning or heating units
- Any property used outside of the U.S.
Did you know that in addition to mileage you can deduct auto loan interest?
Everyone’s favorite year end deduction— mileage, now includes any interest you’ve paid on auto loans!
What doesn’t count:
- Your daily commuting miles don't count as business miles
3. Did you know that the Home-Office deduction equation has simplified?
It has! Up to 300 square feet at $5 per square foot for a whopping total of $1,500. There is still the old method available for filing, it may be worth looking into which one saves you more.
What doesn’t count:
- Multi-Use Space; a playroom/office doesn’t count. Neither does your living room where you occasionally check emails.
It’s not too late!
Contribute to a Health Savings Plan (HSA), a Retirement Savings Plan like a traditional or Roth IRA and a percentage will be deductible. However, each one has a cap A Roth IRA cannot except $5,500, or $6,500 if you’re over 50. HSAs max out at $3,350 for individual and $6,650 for families.
Take these extra few days to scrutinize your account statements. An extra couple hundred in tax liability is nothing to scoff at!
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