The goal is to accelerate your deductions into 2014 and delay income until 2015. Here are some ideas:
1) Stock up on business supplies and materials before the end of the year. These can include: arts and crafts supplies, cleaning supplies, kitchen supplies, curriculum materials, and so on.
If you pay by credit card for an item purchased in 2014, it’s considered a 2014 expense, even if you don’t pay the bill until 2014.
2) Ask parents to pay you in 2015 for the last several weeks of December 2014. Money you receive in 2015 for child care delivered in 2014 is reported by you as taxable income on your 2015 tax return, not 2014.
If a parent gives you a check on December 31, 2014, but you don’t deposit it until 2015, it’s still considered income to you in 2014 (the date you received the check).
3) The sooner you make a contribution to an IRA, the more money you will have at retirement. You can set up a Traditional IRA or SEP IRA before April 15, 2015. Any contributions you make to these IRAs before then will reduce your personal taxable income.
If you set up or contribute to a Roth IRA you won’t reduce your taxes this year, but you will save money later when you withdraw the contribution and interest at retirement tax free.
4) If you make contributions to a charitable organization before the end of the year, you may be able to reduce your personal taxable income if you can itemize your taxes.
5) Sign the “safe harbor” depreciation statement before January 1, 2015 to enable you to avoid depreciating items costing $500 or less in 2015.
Follow these simple steps to save a little more money in 2014!
Tom Copeland – www.tomcopelandblog.com
Image credit: dailysavings.allyou.com
For information on filing your 2014 tax return, see my 2014 Family Child Care Tax Workbook and Organizer.