While it may seem like New Year’s Day was just the other day with the giant ball falling in Times Square, we’re already halfway through 2015. Whether you’re an individual with a W-2 job or a self-employed small business owner who earns 1099 income, now is a good time to review your current tax and financial situation—and to look ahead at the rest of the year and into 2016.
Consider these 2015 midyear tax tips:
Complete your tax extension filings.
If you filed for a tax extension before April 15th, now is a good time to complete your filings with the IRS. Remember that the extension deadline is October 15th, which isn’t that far off into the future. Nail down your deductions, make your calculations, and get your tax return to Uncle Sam so you don’t have to worry about it for the rest of the year.
Don’t forget the September 15th estimated tax deadline.
If you owe estimated taxes as a small business owner or self-employed 1099 contractor, there is a tax deadline looming in less than two months. Estimated tax payments on your income must be paid to the IRS by September 15th. Use Form 1040-ES to complete these filings.
Related Article: How to Maintain a Sane Approach to Taxes
Review your employment/small business situation.
What type of work have you done since January 1st? Do you plan on doing the same type of work the rest of the year? Do you plan on adding a new small business to your repertoire before December 31st? Review your income situation to determine how any changes may affect your taxes for the rest of 2015. If things are status quo, you may not need to make any major tax or financial decisions at this point.
Don’t forget about the summer day camp deduction.
If you sent or will send your kids to a summer day camp this year, you can claim these expenses as a deduction on your tax return. Summer day camp fees can be claimed on your return if you send your child to a summer day camp so that you can either work during the day or look for work. Be sure to keep proper documentation of any summer day camp expenses you incur as a parent so that you’ll have this information readily available to claim the write-off in 2016.
Examine your financial situation.
Take a close look at your overall financial situation. How much money have you made in 2015? Where has this income flowed in? Then look at how much money you’ve spent—and what your expenditures have been this year. See if you can increase your tax-free income and reduce your tax liability on the taxable money you earn. Discover ways to cut your expenses as well, such as revisiting a budget or shopping for less expensive products and services.
Be aware that the healthcare tax penalty went up in 2015.
If you do not have health insurance, consider getting it before the end of the year. The Affordable Care Act, which requires all Americans to have medical insurance or face a penalty, was formally implemented on individuals in 2014. That was when a penalty was first levied on uninsured taxpayers. This year, the penalty has increased to the greater of $325 for adults and $162.50 for children. But it cannot exceed $975 or 2% of household income minus the tax-filing threshold of a certain taxpayer.