The year 2015 brings a number of important changes to personal and small business tax laws and regulations. It’s important that you be aware of them in order to minimize your tax bill and keep more of what you earn on an after-tax basis. Here are some of the most common tax moves you can make that may make a difference in your wallet for 2015.

1. Don’t forget your last-minute 2014 retirement plan contributions. For 401(k) plans, you’ll need to make your last minute contributions before the end of the year. Otherwise you’ll have to wait a year before you get the tax benefit of having contributed (though even if you don’t make the contribution until January you’ll still have the benefit of a year’s worth of tax-deferred growth).

For IRAs, on the other hand, you can still make your tax year 2014 contribution until April 15th, 2015 – your normal filing deadline. If you haven’t contributed the maximum allowable amount for 2014, prioritize that over 2015 contributions. You may well be able to catch up on 2015 contributions later in the year.

2. Try to bunch deductions. Do you have a lot of miscellaneous itemized deductions so far this year? Try to commit to planned deductible expenses before the New Year. If you don’t have a lot of itemized deductions for 2014, or you expect to have a lot of them in 2015, then try to put as many as you can in the same year. This allows you to get the maximum tax benefit out of your miscellaneous itemized deductions, which have to exceed 2 percent of your adjusted gross income (7.5 percent for medical expenses) in order for you to take the deduction. You may be able to pay local and property taxes early, for example, to secure them for this year’s miscellaneous itemized deductions.

3. Did you have capital gains during the year? Try to sell some losing positions and reinvest the proceeds somewhere more productive. This may help you in three ways: You can cancel out your capital gains taxes with capital losses. If you have more losses than gains, and you sell your losing position(s), you can deduct up to $3,000 of those losses against ordinary income. Any additional losses over $3,000 can be carried forward to future years.

Another technique to minimize capital gains taxes is to structure the sale as an installment sale. This spreads the gains out over several years, giving you more time to cancel them out with losses, and also potentially lowering the amount of capital gains exposed to the 3.8 percent Medicare surtax on higher income individuals.

Are you near the threshold for having to pay the 3.8 percent Medicare surtax? Consider moving some IRA contributions from Roth IRAs to traditional IRAs and 401(k)s. This increases your current year deductions and lowers your AGI – potentially keeping you below the income threshold that exposes you to this tax.

4. Be alert for the alternative minimum tax. This tax is increasingly snagging even middle-income families – especially those who have large families, houses, lots of deductions, and who live in high-tax states.

5. Assess whether it may make sense to increase contributions to these plans:

College/Education Savings

Coverdell ESAs
Section 529 Plans
Prepaid tuition programs
Deductible professional education courses (subject to certain restrictions

Retirement savings plans

Traditional deductible IRAs
Non-deductible IRAs
Roth IRAs
Simplified Employee Pension Plans (SEP IRA
401(k) Plans, including Solo 401(k)s for self-employed individuals and couples
SIMPLE IRAs

Health care-related plans and deductions

Health Savings Accounts (must be in conjunction with a qualified high-deductible health plan)
Employer FSAs
Deductions for medical insurance and expenses

6. Take the home office tax deduction. The IRS recently established a ‘safe harbor’ removing some of the more onerous record-keeping requirements for the business use of a home. Click here to learn more about the new simplified method for calculating the home office deduction. For more information, see IRS Publication 587 – Business Use of Your Home.

7. Go over your employee benefits. Ensure you are taking full advantage of any flexible savings accounts your employer offers that may be of use for you. Examples include health care FSAs, dependent care FSAs or commuting/transportation FSAs.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.