Four Summer Tax Moves to Improve Your 2015 Taxes

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Summer is well underway, the year is half over, and you are enjoying the long days and warm weather. Tax season is months away, and you are likely not even beginning to think about your taxes yet. But now is the perfect time to reassess your tax situation in order to ensure that you will not owe exorbitant amounts to the IRS next year. Your payroll expert and Billings, Montana accountant explains 4 quick ways that you can make your taxes more favorable come next spring.

Summer Tax Move: Adjust Your Tax Withholdings

Your 2014 taxes turned out just fine, but perhaps next year you would like to get a refund that is slightly larger. Or maybe you ended up owing money on your 2014 taxes and you’d like to avoid that uncomfortable situation in the future. Fortunately, it’s not too late to adjust your withholdings.

If you are an employee, you likely remember filling out a W4 when you were first hired on. Did you know that you can change those forms at any point throughout the year? Simply talk with your human resources department (or your payroll services provider) and ask that your withholdings be updated. You can specify a smaller number (any number 0 or greater; the higher the number the less is withheld). If you’re already at 0, then you can specify an additional dollar amount to be withheld from each paycheck.

Many people will tell you that you should shoot to have a $0 refund, but really it is in your best interest to have a larger refund.

Summer Tax Move: Save Summer Camp Receipts

If you have a child, and you enrolled him or her in summer camp, keep those receipts! Did you know that the IRS views summer camp as a form of day care? You can deduct up to 35% of your summer camp costs claiming the Child and Dependent Care Credit.

In addition to summer camp, if you’re doing any charity work this summer, like traveling across the state to help rebuild a school, church, or other non-profit, you can deduct 14 cents for every mile you drive.

Summer Tax Move: Increase Retirement Savings

The vast majority of Americans are woefully behind on their retirement savings. They really need to ramp things up in order to meet their goals. You don’t have to be one of those that are behind on their savings.

If your company allows it, boost your savings by 2% this summer. You probably won’t even notice the change in your paycheck, but when it comes time to retire you will be far better off. Next summer, do the same thing.

For those who are maxed out at work, or can’t change contributions mid-year, start putting more into your Roth or Traditional IRA. You can put aside up to $5,500 this year. If you have maxed those out as well, then consider permanent life insurance, or a non-qualified investment plan.

Summer Tax Move: Increase Your Charitable Giving

The standard deduction for 2015 is $6,300 for a single person, $12,600 for a married couple. If you feel you will be coming close to that amount, then you should up your charitable contribution to get a bigger deduction.

You can start simple by giving $50 every two weeks to your favorite charity, and then boost those deduction amounts by doing some summer cleaning. Clear out your closets and garages; anything you haven’t used in a long time, give it away. Be sure to get receipts!

Practical Taxes Can Help

Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2050 to learn more.