Boerne Business Monthly - December 2015

Page 10


Tax Christmas Fruitcake


by Roland Miller, CPA

The end of the year has come upon us once again. It is the time of year when people start thinking of family and holiday gatherings. It is also a time when we begin to close the books on year 2015. But before we start making entries into the year 2016, we have some considerations on what might be helpful in planning for the 2015 tax year and possibly beyond. There are over 50 tax provisions that will need to be extended again for tax year 2015. These are like the Christmas fruitcake that gets passed around from house to house each year. These one-year extender provisions have been consistent holiday gifts for many recent tax years. However, we will have to wait until the end of the year again to see if Congress extends any of these provisions. SOME OF THE MORE WELL-KNOWN PROVISIONS ARE: • For individuals, the itemized deduction for state sales tax in lieu of income tax • The $250 teacher supply deduction • The Section 179 expense limitation— that if not extended will be reduced from $500,000 to $25,000 • Bonus depreciation. For those individuals that donate to charity, there are some areas that you may wish to be aware. One of the provisions that may or may not be extended for 2015 is qualified charitable distributions from an IRA. A taxpayer who is 70 ½ is subject to required minimum distribution rules and must take at least a specific and calculated distribution from their IRA each year. A qualified charitable distribution allows a taxpayer to satisfy the required distribution


B oerne B usiness M onthly | December 2015

rules if they elect to donate their distribution directly to a qualified charity. For any single cash donation of $250 or more, documentation will be required. This can be a cancelled check, bank record, credit card statement, or a written acknowledgement from the charity. If it is a non-cash donation, such as furniture or clothing items, a written acknowledgment from the charity will be required for your records. If the item being donated is over $5,000 in value, there must be an appraisal of the property performed within 60 days of the donation. There are other steps that you can take to reduce your tax liability in 2015 for both individual and business taxpayers.