1. Charitable Contribution:
Contributing to a qualified charity is a great way to get a deduction where you can control the timing and amount. You can do this by donating stock or property (e.g. furniture, clothing) rather than cash. You can deduct the property’s fair market value on the date of the gift which allows you to avoid paying capital gains tax on the built-up appreciation (with specific regards to donating stock).
For cash contributions you must have a receipt to back up any contribution, regardless of the amount.
2. Simplified Employee IRA:
Self-employed individuals do have a couple options when it comes to saving for retirement and one of them is called the Self-Employed IRA. Because these retirement plan grow tax free year over year by the time you take retirement, it often times become a substantial amount. These plans must be established by December 31 but contributions may still be made until the tax filing deadline (including extensions) for your 2015 return. The amount you can contribute depends on the type of plan you choose.
3. Health Insurance:
If you qualify as a self-employed business owner, you may be able to take advantage of great health insurance deductions. The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.
If you have any further questions regarding year-end taxes, please feel free to contact us.