Despite what many people believe, tax planning should be a year-round activity, not just something you do for a few weeks in the beginning of the year.
So, with that in mind, you should keep some potentially valuable tax deductions in the back of your mind as you go through 2015. Here are three big ones our analysts think could save you big bucks on your 2015 taxes.
Matt Frankel: One tax deduction you should take full advantage of in 2015 is for retirement savings.
Many people know that contributions to their 401(k) are on a pre-tax basis (meaning you don't pay tax on that income). However, not many people realize that the IRS will allow for $18,000 in elective deferrals in 2015, and an extra $6,000 if you are over 50. And, all of these contributions are tax-deductible. So, even if your employer only matches a relatively small amount of your contributions, it may still be worth increasing your savings rate to reap the tax benefits.
There are other tax deductions available for retirement savings as well. For example, you can contribute up to $5,500 into a traditional IRA ($6,500 if over 50), and you may be eligible for a tax deduction depending on your income and whether or not you can participate in a plan at work. Plus, lower-income taxpayers may actually be able to get a credit for some of their retirement savings.
And, if you are self-employed, there are several tax-deductible account types you should look into, including a SEP-IRA, SIMPLE IRA, and individual 401(k) plans. The tax breaks available for retirement savings are some of the best available, so make sure you take advantage of them in 2015.
Selena Maranjian: Our nation has been recovering from the last recession, and unemployment has been dropping, but lots of people remain out of work -- or have found less-than-ideal work and are still looking for something better. If you're among those who have been looking for a new job, know that you may be able to deduct some of the costs associated with that endeavor.
There are some rules, though, of course. For starters, you can't be looking for your first-ever job, and you can't be changing careers. You need to be seeking a job in the same occupation that you now have or last had. You can also only claim this deduction if you're itemizing your deductions. The deduction is part of your total miscellaneous expenses, and for that category of deduction, you can only deduct whatever sum exceeds 2% of your adjusted gross income (AGI). For example, if your AGI is $50,000, 2% is $1,000. So if your qualifying job-hunting expenses (along with any other qualifying miscellaneous expenses) total $3,000, you can deduct $2,000 from your taxable income. If you're in the 25% tax bracket, you just saved $500!
So what expenses qualify? Some examples are the cost of printing resumes and business cards, postage to mail out applications, transportation expenses (flights, trains, cabs, buses, and even $0.56 per mile if you drive), hotel expenses, employment agency fees, and more. The IRS offers more rules here. Note, too, that you don't even have to land the job you were trying to get. Just searching is sufficient. (And a final tip -- if you land a job and have to move at least 50 miles away for it, you may be able to deduct many of your moving costs, too!)
Dan Dzombak: One tax deduction that could save you big bucks in 2015 is donations of appreciated stock. With the stock market up 90% over the past five years, you likely have some stocks that have greatly appreciated. If you hold these in taxable accounts, depending on your tax bracket, you could owe capital gains taxes of anywhere from 15%-23.8% on your gains, not including state capital gains taxes, which add another 5% on average depending on the state.
By donating appreciated stock, you get to claim the donation at the price the value the shares are trading at when you make the donation. The added benefit is that you don't have to pay any capital gains taxes on the shares.
One note, there are limits to the tax deductibility of charitable contributions, though -- if you are over the limit, donations can be carried over to future tax years.
You can deduct up to 20% of your adjusted gross income with no limits. Once you donate more than that, limits begin to apply depending on the type of donation, your income, and the type of organization you're donating to. You can read the IRS's complete guide to limits on charitable donations here.