TaxACT Shares Five Year-End Strategies to Boost Tax Savings
Smart strategies now will increase tax savings and put taxpayers first in line for refunds
Cedar Rapids, IA - December 11, 2014 - TaxACT®, the critically acclaimed leader of affordable tax preparation solutions, has created a list of five easy tax tips and reminders for all taxpayers. Regardless of the outcome of extender tax breaks and an IRS open date, Americans still have time to maximize refunds, and get a head start on their returns to be first in line for their refunds.
Taxpayers can begin 2014 tax returns now with TaxACT's online, download and mobile solutions. TaxACT will be updated with final tax law changes and IRS forms in early January, at which time customers can e-file and be among the first taxpayers to receive their refunds. Returns will be submitted to the IRS as soon as its doors open.
#1 – Make the most of employer's tax-free benefits
If you have a flexible spending account (FSA) balance, find out if your employer has implemented the new rule allowing a carryover of up to $500 in excess funds to March 15, 2015. If not, use the remaining balance by Dec. 31 so you don't lose that tax-free money.
Maximize the tax benefits for retirement savings by contributing up to $17,500 to a 401(k) and $5,500 to your traditional and Roth IRAs ($6,500 for 50 and older). Unlike most tax benefits, IRA contributions made through the April 15 deadline count toward 2014 totals. Even if you can't reach the contribution limits, contribute enough to maximize your employer's match.
Additional retirement tax benefits are also available for employees with lower incomes, self-employed and sole proprietors.
#2 – Be charitable
Donating cash, clothing or a car by Dec. 31 can reduce your taxable income if you itemize deductions. Get a head start on your tax return by entering cash, non-cash and recurring donations into TaxACT's Donation Assistant, available as a free mobile app and in TaxACT Deluxe.
A new version of the mobile app, available in Android™ and Apple® stores, includes:
Audit-backed, fair market values for clothing, furniture, electronics, appliances and other household items for 2014
Automatic data synching to TaxACT's secure servers
App data import into TaxACT Deluxe returns (available in early January)
Integration with TaxACT Accounts to securely manage donations, tax returns and more from any device with the same username and password
#3 – Evaluate your health insurance situation
If you want Affordable Care Act marketplace insurance effective Jan. 1, 2015, enroll or renew by Dec. 15.
Before applying, get TaxACT's HealthWatch report with all the tax information needed for marketplace applications. HealthWatch, in TaxACT Free Federal and Deluxe, includes details for a more accurate estimate of 2015 income to help advanced premium tax credit recipients avoid a large tax bill in 2016.
Uninsured for more than three months in 2014? Visit healthcare.gov to see if you qualify for an exemption. Hardship exemptions requiring approval via a paper application can take several weeks for your marketplace to process, so apply now to avoid a delayed tax refund.
If you don't qualify for an exemption, calculate your 2014 individual shared responsibility payment in TaxACT or with TaxACT's Tax Penalty Calculator at HealthcareACT.com .
#4 – Assess your gains and losses
Capital gains can be offset by capital losses to reduce your taxable income. You can also deduct up to $3,000 ($1,500 if married filing separately) of excess losses for 2014. Losses in excess of that amount can be carried forward to 2015.
When deciding whether to keep or sell assets, consider your tax brackets, mix of short- and long-term assets, and investment goals. Keep in mind:
Capital gains are generally taxed at lower rates than other income, but short-term gains are taxed at a higher rate than long-term gains.
Short-term gains are taxed at your highest tax bracket, so consider selling short-term losses to offset short-term gains. If all gains are short-term, look at selling long-term losses.
Wash sale rules prohibit a loss if you buy the same stocks or securities within 30 days of selling.
#5 – Forecast your 2014 taxes now
TaxACT is up-to-date with tax law changes for 2014. Import last year's return and answer easy questions to preview your federal and state taxes. The program will notify you if your deductions or credits are included in tax extender legislation.
Returns can be completed and e-filed in TaxACT starting in early January. TaxACT will transmit early returns to the IRS as soon as the agency opens its doors.
TaxACT also offers a free Tax Calculator for estimating 2014 taxes at www.taxact.com/tax-calculator.
TaxACT is the critically acclaimed leader of affordable digital and download tax preparation solutions for individuals, business owners and tax professionals. TaxACT was the second-most visited online tax preparation destination for the 2013 tax season1. In the 2005 tax season, TaxACT became the first to offer free federal tax software and e-file to all U.S. taxpayers. Since 2000, TaxACT has assisted with nearly 53 million e-filed federal returns. TaxACT is a business of Blucora, Inc. (NASDAQ: BCOR ). Learn more about TaxACT at www.taxact.com and www.taxact.com/press.
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