With less than two weeks to go before the April 15 tax deadline here are a few time-sensitive ideas for your consideration. As always, contact your Frazer LLP tax advisor in Brea (714.990.1040) or Visalia (559.732.4135) with any questions or to determine if you qualify.
Do You Need to File a Gift Tax Return by April 15, 2015?
Generally, you’ll need to file a gift tax return for 2014 if, during the tax year, you made gifts:
- That exceeded the $14,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse),
- That you wish to split with your spouse to take advantage of your combined $28,000 annual exclusions, or
- Of future interests — such as remainder interests in a trust — regardless of the amount.
If you transferred hard-to-value property, such as artwork or interests in a family-owned business, consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file.
There may be other instances where you’ll need to file a gift tax return — or where you won’t need to file one even though a gift exceeds your annual exclusion. Contact us for details.
Yes, There is Still Time to Make a 2014 IRA Contribution!
The deadline for 2014 IRA contributions is April 15, 2015. The limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on Dec. 31, 2014).
If you haven’t already maxed out your 2014 limit, consider making one of these types of contributions by April 15:
1. Deductible traditional. If you and your spouse don’t participate in an employer-sponsored plan such as a 401(k) — or you do but your income doesn’t exceed certain limits — the contribution is fully deductible on your 2014 tax return. Account growth is tax-deferred; distributions are subject to income tax.
2. Roth. The contribution isn’t deductible, but qualified distributions — including growth — are tax-free. Income-based limits may reduce or eliminate your ability to contribute, however.
3. Nondeductible traditional. If your income is too high for you to fully benefit from a deductible traditional or a Roth contribution, you may benefit from a nondeductible contribution to a traditional IRA. The account can still grow tax-deferred, and when you take qualified distributions you’ll be taxed only on the growth. Alternatively, shortly after contributing, you may be able to convert the account to a Roth IRA with minimal tax liability.
Want to know which option best fits your situation? Contact us.
Own Commercial Property? Don't Miss This One-Time Opportunity to Increase Your Cash Flow
If you own commercial real estate you have a unique, one-time opportunity to create significant increased cash flow. The time to act is limited to the 2014 tax year filing deadline.
Under the new IRS rules, effective January 1, 2014, owners of commercial real estate can now assign a value to the 39-year components that are replaced and write-off and treat as a deductible expense the remaining adjusted tax basis. These Partial Dispositions can be taken during the current tax year.
To learn about the key aspects of this new law,