Issue link: http://viewer.e-digitaledition.com/i/531147
Back to the BASICS— Claim all charitable donations. Most people charities send a receipt for everything, but they don't, as they are only required to send receipts if your donation is $250 or more. For anything less than $250, you are required to have a copy of a cancelled check or a credit card receipt. Make sure you take credit for all your deductions, no matter how small, by keeping track of them. The best way to do this is to pay them all either by credit card or check. Each month, as you receive your bank and credit card statements, review them for charitable donations. Highlight the page containing the donation and put it in your tax folder. Also, don't forget to claim the old clothes or household items you donate to your favorite charity. Submit all eligible reimbursable work expenses to your employer in a timely manner — at least quarterly. Too often I hear clients say that they have work expenses they want to claim on their personal tax returns. When I tell them they would be much better off to submit the expense to their employer for a tax-free reimbursement, they say, "What's the difference? I will just deduct it now." There are several issues that work against that logic: a) the IRS does not allow an employee to deduct a business expense if the employer would have reimbursed it; b) employee business expenses don't provide a tax benefit unless they are more than 2 percent of your total income, and even if you are able to meet that high hurdle, there is this nasty thing called alternative minimum tax that will likely eliminate any actual tax benefit; c) a tax-free reimbursement puts 100 cents of every dollar you spent back in your pocket; a tax deduction (if allowed) only puts a maximum of 45 cents back in your pocket. Maximize your annual employee retirement plan and health savings account (HSA) contributions whenever possible. The 2015 annual limits for 401(k) and 403(b) plans are $18,000 for those under 50 and $24,000 for age 50 or older. The 2015 annual limits for HSAs are $3,350 for singles and $6,650 for families. If you are age 55 or older, you can contribute an additional $1,000 for the year. Also, if your children are on your family health insurance, but you do not claim them as dependents, they can contribute to their own HSA because their medical expenses are not eligible to be paid from your HSA. This is a great loophole, because their contribution limit is also $6,650. Mike Livesay is a CPA and Principal of Weidrick Livesay & Company in Akron, Ohio. ■ Simple Ways to Maximize the Cash in Your Pocket By Michael T. Livesay CPA/PFS 3 Want to increase your Post-tax dollars? These three basic tips can help. 2 0 1 5 J U LY/AU G U S T ■ M D N E W S . CO M ■ MD NEWS Cleveland/Akron/Canton | 2 9