Year End Checklist for Employees

With the end of the year drawing near, now is a good time to spend a little tax planning.

  • Check your withholding. Is it in line with your income and deductions? If not, file a new W-4 with your employer
  • Review your employee benefits. Are you taking advantage of all your employer has to offer?
  • Charitable Contributions - donate by 12/31/14 for deductions this year.
  • Budgeting - how are you doing on this years goals? What are your goals for next year?

A little planning now can reduce your taxes in April!

Year End Checklist for the Self Employed

Now is a great time to take a quick look at your tax situation for this year as there is still time to make needed adjustments. Here is a short checklist:

  • žCheck your tax deposits to avoid underpayment penalties. Your final quarterly tax deposit is due on January 15, 2015.

  • Check your income. If more or less than you predicted some year in tax planning may be in order.

  • Check our expenses. Speed up or slow down your spending as needed.

  • Retirement planning, now is a good time to review your plan or start one.

Taking a few minutes now can improve your tax situation.

Federal Tax Return - Standard Mileage Rates.

Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56 cents per mile for business miles driven
  • 23.5 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The business, medical, and moving expense rates decrease one-half cent from the 2013 rates.  The charitable rate is based on statute.

The 2013 mileage rates were:

  • 56.5 cents per mile for business miles driven
  • 24 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Changes to Itemized Deduction for 2013 Income Tax Returns - Medical Expenses

For those who itemize their deductions on Form 1040, Schedule A, new rules may affect your medical expense deduction. This new rules raises the threshold that unreimbursed medical and dental expenses you paid for yourself, your spouse, and your dependents must reach before a deduction is permitted.

Most people who itemize their deductions can claim deductions for unreimbursed medical expenses, those which are not covered by health insurance, that exceed 10 percent of their adjusted gross income. Previously, the law permitted deductions for unreimbursed expenses in excess of 7.5% of their adjusted gross income.

There is a temporary exemption for taxpayers age 65 and older

There is a temporary exemption for individuals age 65 and older until Dec. 31, 2016. If you are 65 years or older, you may continue to deduct total medical expenses that exceed 7.5% of your adjusted gross income through 2016. If you are married and only one of you is age 65 or older, you may still deduct total medical expenses that exceed 7.5% of your adjusted gross income.

This exemption is temporary. Beginning Jan. 1, 2017, the 10% threshold will apply to all taxpayers, including those over 65.