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The LIBRE Institute - Financial Power Breakfast - Presentations
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- 4. Cesar Grajales wasborn in Colombia and moved to Miami at the age of 17. His professional background covers different fields, from the music business industry and Hispanic entertainment to the stock market. His unwavering commitment to the preservation of economic freedom in the United States led him to join LIBRE’s cause from its beginning; first as a volunteer, then as a writer for Fox News Latino on political and economic issues, later as Field Representative and as a Field Director in LIBRE’s office in South Florida and currently as Florida State Director. Grajales has successfully promoted de principles of economic freedom amongst the growing Hispanic community in Florida. In his current role, he coordinates events at a state level, and represents the organization at fairs, forums and conferences promoting LIBRE’s cause among fellow Floridians. Grajales has a vast experience in business administration, management, political campaign operations and grassroots operations. CESAR GRAJALES Florida State Director
- 5. Mr. Barrera isa recognized national leader in the business and Hispanic community. He is an attorney with over 30 years of business, legal, non-profit and government experience and he serves as National Manager of Economic Prosperity for The LIBRE Institute. Mr. Barrera previously served as President of the Business Information Clearinghouse (BIC) Mr. Barrera also served as President and CEO of the United States Hispanic Chamber of Commerce (USHCC). Mr. Barrera received his law degree from the University of Texas School Of Law in 1989 and a bachelor’s degree from Kansas State University in 1982. He was also educated at Harvard Business School and the Marshall School of Business at USC. He has previously been named one of the Top 100 Hispanics in Business as well as one of the Top Diversity Advocates in America. He currently lives in Kansas City, MO. MICHAEL BARRERA National Manager Economic Prosperity
- 6. Hispanic Financial Planning MichaelBarrera National Manager Economic Prosperity The LIBRE Institute www.thelibreinstitute.org
- 7. The LIBREInstitute is a non-profit, non-partisan C3 organization. It is committed to strengthening America and building prosperous Hispanic communities through Our Four Pillars that focus on Economic Prosperity, Education, Faith, and Family Surveys indicate that Hispanics want more information on personal finances and entrepreneurship. Economic Prosperity Pillar seeks to increase the level of independence within the U.S. Hispanic community by further educating the community on Financial Wellness and Entrepreneurship. Independence and self-sufficiency create Freedom and Freedom Drives Progress The LIBRE Institute What is the Institute?
- 8. There arean estimated 54 million Hispanics currently residing in the US 66,000 Hispanics turn 18 every month or almost 800,000 a year Hispanic households (49%) are more likely to have children under 18 vs. general population (34%) The Hispanic population is expected to grow 167% from 2010 to 2050 vs. 42% growth for the total population. By 2020 30.5 million Hispanic entrants into the labor force nearly tripling the 10.7 million reported in 1990 It is estimated Hispanics spend over 1.3 Trillion a year Hispanics-A Growing Community
- 9. Hispanic Short andLong Term Financial Priorities -Reduce Debt 52% vs. 50% G.P. (General Population) -Building emergency Savings Account 42% vs. 41% G.P. -Having enough life insurance to protect loved ones 23%-21% G.P -Saving for a Major Purchase like a car, appliance or vacation 21% vs. 20% G.P. -Leaving Inheritance for children or other heirs 17% vs. 17% G.P. -Saving for Retirement 53% vs 62% G.P. -Protecting investments/Savings 25% vs. 47% G.P. -Saving to purchase a home 23% vs. 13% G.P. -Funding education for children/grandchildren 31% vs. 18% G.P. -Caring for Elderly family members 15% vs. 6 % G.P.
- 10. Hispanic Financial Stats •Total Assets for those earning under $75, 000 • $33,000 vs $97,000 for General Population (GP) • Total Assets for those earning over 75, 000 • $104,000 vs $ 237,000 for GP
- 11. National Debt • Accordingto Forbes U.S. debt = 10 trillion in 2008 • 2015 =18.2 Trillion dollars and by 2019 expected to be 20.6 trillion • 93k per person in 2008; 161k per person 2019 • Higher taxes, Lower wages • Lower standard of living • Student loan debt is 1.3 Trillion dollars • Hispanics whose average age is significantly lower will bear burden of increased debt • Big Difference between debt and deficit • Personal and Family financial planning becomes even more important
- 12. Other Financial Considerations •Household expenses, health care costs, children’s education, savings and debt level—all near-term concerns—are ranked as higher concerns than retirement. • Family finances are often multigenerational and global, as evidenced by one in six supporting parents and 42% of non-U.S. born sending money to relatives in their home country.
- 13. Healthy & WealthyChoices • 70% of the wealthy eat less than 300 junk food calories per day • 23% of the wealthy gamble • 80% of the wealthy are focused on accomplishing some single goal • 81% of the wealthy maintain a to-do list • 76% of the wealthy exercise aerobically four days a week • 70% of the wealthy parents require children volunteer 10 hours or more a month • 67% of the wealthy write down their goals • 6% of the wealthy say what’s on their mind • 97% of the poor people eat more than 300 junk food calories per day. • 52% of the poor people gamble. • Only 12% of the poor do this • 19% of the poor people maintain a to do list • 23% of the poor exercise aerobically 4 times a week. • 3% of the poor make their children volunteer 10 hours or more a month • 17% of the poor write down their goals • 69% of the poor say what’s on their mind!
- 14. Healthy & WealthyChoices • 67% of the wealthy watch one hour or less of TV every day • 6% of the wealthy watch reality TV • 84% of the wealthy believe good habits create opportunity luck • 76% of the wealthy believe bad habits create detrimental luck • 86% of the wealthy believe in lifelong educational self- improvement • 88% of the wealthy read 30 minutes or more each day for education or career reasons • 23% of the poor 1 hour or less of TV everyday • 78% of the poor watch reality TV • 4% of the poor believe good habit create opportunity luck • 9% of the poor believe bad habits create detrimental luck • 5% of the poor believe in lifelong educational self- improvement • 2% of the poor read 30 minutes or more each day for education or career reasons
- 15. Mr. Dore-Bernhard earnedhis finance degree from Florida International University. He then went on to pursue his MBA at Nova Southeastern University. He has held various investment, insurance and mortgage licenses. His experience in financial planning expands from bank telling, to having been the youngest investment portfolio manager at one of the big four US Banks at the early age of 24. In addition Mr. Bernhard has been a private banker, a business owner in the mortgage, insurance, and financial consulting areas, an occasional writer and a contributor of financial topics to newspapers and websites. He is committed to excellence in his work and service, he is goal-oriented, organized, disciplined, and he demonstrates leadership based on principles and values. His favorite quote is: “Change your focus, from making money to serving more people. Serving more people makes the money come in.” – Robert Kiyosaki.. MARIO DORE-BERNHARD Financial Advisor ClearPoint’s Hispanic Center for Financial Excellence (HCFE)
- 16. ClearPointCCS.org ClearPoint Surviving on aLimited Budget Mario Dore-Bernhard Financial Advisor [email protected] 305.592.9298 - Ext. 2135
- 17. ClearPointCCS.org Objectives Create aspending plan to help you get back to basics Identify ways to increase income and help you survive on a limited budget Identify ways to reduce financial stress and handle your financial situation
- 18. ClearPointCCS.org How Can ISucceed On a Limited Budget?
- 19. ClearPointCCS.org Step 1: Createa Priority Spending Plan List your current income and expenses
- 20. ClearPointCCS.org Creating a PrioritySpending Plan A Priority Spending Plan: Ensures you pay the most important items first Helps you make spending choices that support your goals Offers a way to track your income and expenses
- 21. ClearPointCCS.org Priority Spending Plan:Step By Step Identify goals Step 1 Identify monthly income Step 2 Prioritize monthly expenses Step 3 Subtract spending from income Step 4 Adjust your priority spending plan Step 5 Small daily choices can have a big impact on if we reach our goals or how fast we achieve them
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- 24. ClearPointCCS.org Your Spending Plan IncomeJanuary 4 weeks February 4 weeks March 5 weeks April 4 weeks Total Income $1,600 $1,600 $2,000 $1,600 Expenses: Rent $800 $800 $800 $800 Car payment $150 $150 $150 $150 Utilities $200 $180 $240 $170 Food $250 $280 $340 $260 Debts $120 $120 $120 $120 Total Expenses $1,520 $1,530 $1,650 $1,500 Disposable income $80 $70 $350 $100
- 25. ClearPointCCS.org Where Does YourMoney Go? Track your expenses for 30 days Total all columns and expenses Review your overall expenses
- 26. ClearPointCCS.org Where Does YourMoney Go? Fixed expenses: The same each month Variable expenses: Different each month Periodic expenses: Due once or twice a year
- 27. ClearPointCCS.org What Are YourSpending Habits? Observe how you feel when you need to spend Avoid going to stores when you feel the need to spend Substitute the need to spend with something different Leave your credit cards at home whenever possible
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- 29. ClearPointCCS.org Step 2: DifferentiateBetween Wants and Needs If expenses exceed income, adjust your spending plan
- 30. ClearPointCCS.org Essential Needs • Housing •Food • Utilities • Transportation
- 31. ClearPointCCS.org Step 3: Identifyways to increase income • Part-time job / freelance work • Ask family members for help (e.g. rent contribution, child care) • Small business • Public assistance • Roommate • Garage sale / online sales (e.g. eBay) • Cut costs / reduce unnecessary expenses (e.g. gym, cel phone, cable)
- 32. ClearPointCCS.org How Can YouSave? Take lunch to work and eat at home more Use coupons, buy store brands or buy in bulk at club stores Give handmade cards and gifts Consolidate plans and services Utilize free resources at the library and online
- 33. ClearPointCCS.org Saving to ReachYour Goals Determine the amount you can save each month after expenses Assign those savings to each goal Modify the term to reach your goals accordingly Adjust as necessary
- 34. ClearPointCCS.org Reduce Financial Stress Develop a priority spending plan and debt reduction plan De-clutter your home Communicate with your family and set realistic expectations Shop with a purpose Adopt a ‘less is more’ attitude Eliminate barriers to your success
- 35. ClearPointCCS.org Reduce Emotional Stress Develop a healthy living plan Exercise regularly Get proper nutrition Maintain relationships with friends and family
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- 37. ClearPointCCS.org Succeeding on aLimited Budget!
- 38. ClearPointCCS.org ClearPoint Thank You forAttending For more information, visit our website www.ClearPointCCS.org/HCFE To set up a counseling appointment, call us at 305.592.9298 - Ext. 2135 Mario Dore-Bernhard Financial Advisor [email protected]
- 39. ClearPointCCS.org ClearPoint How Do IGet Out of Debt? Mario Dore-Bernhard Financial Advisor [email protected] 305.592.9298 - Ext. 2135 ClearPointCCS.org
- 40. ClearPointCCS.org Objectives Understand thedifference between good debt and bad debt Identify how small costs add up Build a workable plan to pay down debts
- 41. ClearPointCCS.org What Would YourLife Be Like Without Debt? How much money would you save each month to achieve your dreams and goals?
- 42. ClearPointCCS.org Good Debt vs.Bad Debt
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- 44. ClearPointCCS.org Understand Why YouAre In Debt Understand why you are in debt Observe how you feel Give each dollar a purpose
- 45. ClearPointCCS.org Always Spend LessThan You Make EXPENSES INCOME
- 46. ClearPointCCS.org Small Costs AddUp Car Repair Movies Coffee Prescriptions Dining
- 47. ClearPointCCS.org Small Costs AddUp Today’s $500 when paying $15 minimum payments takes 6 years to repay. This means your total cost is $1,162!
- 48. ClearPointCCS.org Find Additional Dollars Take lunch to work and cook meals at home Use grocery coupons and buy store brands Unplug computers, TVs and other utilities Bundle services for possible discounts Buy in bulk at club stores Utilize websites and online resources Check out books from the library Look for ways to generate income
- 49. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts
- 50. ClearPointCCS.org Maria and Juan Wanted to save for a down payment on a home 5 credit cards combined $8,000 total debt
- 51. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts A. Make a list of your debts including balance and interest rate for each, from smallest to largest balance
- 52. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts B. Write down the minimum monthly payment for each debt
- 53. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts C. Determine how much extra money you will set aside in your spending plan to pay down your debts $125
- 54. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts D. Add these additional dollars to the minimum payment of the first debt on your list $125 + 10 $135
- 55. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts E. Continue to make the minimum monthly payment on all other debts
- 56. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts F. Once the first debt is paid off, add the monthly payment amount from the first debt to the minimum payment of the second debt on your list
- 57. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts G. Continue this process until all debts are paid off
- 58. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts H. Use any additional income you receive as additional money to pay down your debts
- 59. ClearPointCCS.org Build a WorkablePlan to Pay Down Debts Do not put more debt on any of these credit cards while they are being paid off
- 60. ClearPointCCS.org Pay Off SecuredDebt: Smallest Balance DEBT BALANCE INTEREST RATE (%) MINIMUM PAYMENT NEW PAYMENT Credit card 1 200 32% 10.00 Card 1 + (additional) Credit card 2 300 16% 15.00 Card 1 + 2 Credit card 3 500 27% 48.00 Card 1 + 2 + 3 Credit card 4 1000 9% 65.00 Card 1 + 2 + 3 + 4 Credit card 5 2000 14% 159.00 Card 1 + 2 + 3 + 4 + 5
- 61. ClearPointCCS.org Pay Off SecuredDebt: Highest Interest Rate DEBT BALANCE INTEREST RATE (%) MINIMUM PAYMENT NEW PAYMENT Credit card 1 200 32% 10.00 Card 1 + (additional) Credit card 2 500 27% 48.00 Card 1 + 2 Credit card 3 300 16% 15.00 Card 1 + 2 + 3 Credit card 4 2000 14% 159.00 Card 1 + 2 + 3 + 4 Credit card 5 1000 9% 65.00 Card 1 + 2 + 3 + 4 + 5
- 62. ClearPointCCS.org After Unsecured Debtis Paid Off Consider paying off secured debt Build up savings or retirement accounts Pay off new debts
- 63. ClearPointCCS.org Pay Off SecuredDebt If you are unable to build a workable plan to pay down your debts, contact ClearPoint to help you by implementing a debt management plan.
- 64. ClearPointCCS.org Summary Understand thedifference between good debt and bad debt Identify how small costs add up Build a workable plan to pay down debts
- 65. ClearPointCCS.org ClearPoint Thank You forAttending For more information, visit our website www.ClearPointCCS.org/HCFE To set up a counseling appointment, call us at 305.592.9298 - Ext. 2135 Mario Dore-Bernhard Financial Advisor [email protected]
- 66. ClearPointCCS.org ClearPoint Financial Success StartsHere Mario Dore-Bernhard Financial Advisor [email protected] 305.592.9298 - Ext. 2135
- 67. ClearPointCCS.org Ten Basic Rulesof Money Management 1. Plan 2. Set financial goals 3. Assess your financial situation 4. Develop a realistic spending plan 5. Don’t allow expenses to exceed income 6. Save 7. Pay your bills on time 8. Differentiate between wants and needs 9. Use credit wisely 10.Keep a record of daily expenditures
- 68. ClearPointCCS.org What Are YourDreams? Car House Vacation Education
- 69. ClearPointCCS.org Can Your DreamsBecome Financial Goals? Goals are statements about things you would like to do or accomplish. To create goals: Start with the end in mind Write your goals down Make goals specific
- 70. ClearPointCCS.org Can Your DreamsBecome Financial Goals? Set a timeline and budget to accomplish your goals Measure your progress from time to time Make adjustments as necessary
- 71. ClearPointCCS.org When Will YouReach Your Goals? •Can be accomplished within in one year Short-term goals •Can be accomplished in 2 to 4 years Mid-range goals •Can be accomplished in 5 years or more Long-term goals
- 72. ClearPointCCS.org If you had$5,000 what would you do with it? Where Do You Want To Be In 5 Years?
- 73. ClearPointCCS.org Start with theend in mind Write down your goals Adjust your goals as necessary Setting Goals In 3 Simple Steps
- 74. ClearPointCCS.org Adjust Your Goalsas Necessary
- 75. ClearPointCCS.org Financial Stability Reserves Insurance Fixed assets Variable assets
- 76. ClearPointCCS.org Ten Basic Rulesof Money Management 1. Plan 2. Set financial goals 3. Assess your financial situation 4. Develop a realistic spending plan 5. Don’t allow expenses to exceed income 6. Save 7. Pay your bills on time 8. Differentiate between wants and needs 9. Use credit wisely 10.Keep a record of daily expenditures
- 77. ClearPointCCS.org ClearPoint Thank You forAttending For more information, visit our website www.ClearPointCCS.org/HCFE To set up a counseling appointment, call us at 305.592.9298 - Ext. 2135 Mario Dore-Bernhard Financial Advisor [email protected]
- 78. Ms. Sega isa self-motivated and highly qualified professional with experience expanding in financial planning, tax preparation and banking. She is currently the President of International Marketing Agency Inc., located in Miami, Florida. She earned her Master’s in Business Administration at Florida International University. She also possesses a Bachelor of Economy and a Computer Associate degree. Ms. Sega has served as a loan officer for Bank of America and JP Morgan Chase. In addition she has and continues to serve as the President of the Peruvian American Chamber of Commerce. MARICARMEN SEGA President, International Marketing Agency, Inc.
- 79. Video link MARICARMEN SEGA President,International Marketing Agency, Inc.
- 80. MARICARMEN SEGA TAX &ACCOUNTING (786) 290-2899 [email protected] INTERNATIONAL MARKETING AGENCY INC.
- 81. 2015 TAX RETURN TOPICS •VIDEO “VALE LA PENA ESTAR AL DIA CON SUS IMPUESTOS” • IMPORTANT 2015 TAX CHANGES • ITEMIZED DEDUCTIONSFOR EVERY TAXPAYER
- 82. 2015 marks thefourth year of tax law uncertainty. Many popular tax laws extended through last year have expired once again. Outlined here are some of the major tax provisions that can impact the amount of income tax you will pay. But stay alert, if the past is any indication, Congress could change tax laws at any time throughout the year. Individual Taxes Tax Rates. While tax rates remain unchanged for 2015, the income brackets that apply to these rates has been increased approximately 1.5 to 2%. Income Tax Rates - Year 2015 10%, 15%, 25%, 28%, 35%, 39.6% Long-term Capital Gains Tax rate if in… 10% - 15% income tax bracket 0% 25% - 35% income tax brackets 15% 39.6% income tax bracket 23.8%* •includes 3.8% Medicare surtax to help pay for the Affordable Care Act The higher 39.6 tax rate applies to anyone who has income above 413,200 single, 439,000 head of household, and 464,850 married filing joint. Important 2015 tax changes 2015 TAX RETURN 2015 Tax Alert
- 83. Deduction and ExemptionPhase-out. For 2015, up to 80% of your itemized deductions and all of your personal exemptions could be phased out. This will impact you if your income is over $258,250 single, $284,050 head of household or $309,900 married filing jointly. If you lost some of your exemptions or itemized deductions in 2014 you may want a review of your situation. Earned Income Credit. Changes in the Earned Income Credit that expand the amount of the Credit and the income qualifications to receive the Credit are still in place for 2015. Child Tax Credit. The child tax credit stays at $1,000 in 2015 with some of the credit being refundable. American Opportunity Tax Credit (AOTC). The AOTC (formerly named Hope Education Credit) is available through 2017. This provision allows for up to $2,500 in qualified secondary educational expense (tuition, fees, and materials) to be deducted for qualified students. The AOTC covers four (formerly two) years and has income limitations ($80,000 for single; $160,000 for married filing joint). Even better, if your federal tax bill is zero, up to 40% of the credit is refundable; meaning you still could get some cash back. Important 2015 tax changes 2015 TAX RETURN
- 84. Health Care SavingsAccounts. The Health Care Savings Account (HSA) annual contribution limits for those in qualified high deductible health insurance plans is $3,350 for a single taxpayer and $6,650 for a family. If you are age 55 or over the amount increases by $1,000. Social Security Limits. In 2015, income subject to Social Security tax will increase from $117,000 to $118,500 with the employee portion taxed at 6.2%. Key Tax Laws Extended A number of popular tax deductions have not had their provisions made permanent within the tax code. These on-again, off- again tax provisions ARE NOT available in 2015. This may change so please keep required documentation in case Congress changes their minds once again. Key among them are: The $250 “above-the-line” deduction for unreimbursed classroom expenses for qualified elementary and secondary school teachers. Important 2015 tax changes 2015 TAX RETURN
- 85. The $250“above-the-line” deduction for unreimbursed classroom expenses for qualified elementary and secondary school teachers. The option to use general sales tax as an itemized deduction option in lieu of taking a state income tax deduction. The deduction for qualified tuition and educational expenses. Deductibility of mortgage insurance premiums as an itemized deduction. Tax beneficial treatment of direct charitable contributions from a qualifying senior’s IRA. 50% Bonus Depreciation for assets placed in service during the tax year. Other Key 2015 Tax Laws Estate Taxes. In 2015, the maximum estate tax is 40%. Up to $5,430,000 in assets are sheltered from this tax. In addition, the ability to transfer unused portions of your estate tax exclusion to your spouse are now a permanent part of the tax code. Gift Taxes. The gift tax rates are re-unified with estate taxes. This means the gift tax exclusion amount for 2015 is $5.43 million with a top gift tax rate of 40%. The annual gift exclusion amount is $14,000 ($28,000 per couple). Health Care Provisions. In 2015 there are two Affordable Care Act tax provisions worth noting. Important 2015 tax changes 2015 TAX RETURN.
- 86. 1. Shared ResponsibilityPayment. If you do not have qualified health insurance for yourself and your dependents you will need to pay a fee. In 2015 the fee is the higher of; 2% of your yearly household income (1% in 2014) up to the cost of the average qualifying insurance premium OR $325 per person ($162.59 per child under 18) with a family maximum of $975 ($285 maximum in 2014). There are exceptions to this fee if you meet certain requirements including low income and lack of affordable insurance options. 2. Premium Tax Credit. If you purchase your health insurance through a Marketplace Exchange you could be eligible to receive a credit to help cover the cost of your insurance premium. The credit varies depending on your location, your income, number of dependents, and your health plan classification. It is important to accurately reflect your current situation when you apply for this coverage through the exchange. It is also important to review your Form 1095-A for accuracy at the end of each year. Making errors in this area could result in unpleasant tax surprises at the end of the year. Important 2015 tax changes 2015 TAX RETURN
- 87. This limit isreduced by total purchases of qualified property in excess of $200,000 ($2 million in 2014). Section 179 allows small business owners to expense versus depreciate qualified property up to the published limits. Please remember that business depreciation related provisions only impact the timing of when you expense your depreciation and not the total amount of depreciation you may expense over the life of the assets purchased. Important 2015 tax changes 2015 TAX RETURN Mileage Rates. The amount available for qualified deduction of automobile use is: Mileage Rates (per mile) Item 2015 2014 Business 57.5¢ 56.0¢ Medical / Moving 23.0¢ 23.5¢ Charitable 14.0¢ 14.0¢ Business Taxes Section 179 Limits. The maximum section 179 deduction for property placed in service in 2015 is currently $25,000 ($500,000 in 2014).
- 88. Home Office SafeHarbor Calculation. Remember there is a simplified way to take a home office expense for a portion of your home. The expense is up to $1,500 and replaces the cumbersome allocation of valid home expenses allocated by a percent of the home used for business. Common Business Credits Expire. A number of other business tax provisions expired and are no longer available in 2015. Some of the more common: 15-year straight line depreciation for qualified leasehold improvements, restaurant and retail improvements Important 2015 tax changes 2015 TAX RETURN. Research and Experimentation Tax Credit New markets tax credit Empowerment zone incentives Work Opportunity Tax Credit Biodiesel and alternative fuels incentives. Special charitable deduction rules for food inventory. This is a brief summary of some of the most broadly applicable tax changes in 2015. There are also many other pre-programmed changes built into the tax code. Should you have any questions regarding your situation, please call.
- 89. Itemized Deductions Once allyour income is reported it is time to focus on capturing ALL your allowable deductions. And while the IRS is getting very good at automatically notifying you if you under-report your income, taxpayers are rarely given the same courtesy should they omit a valid deduction. How do you make sure you gather and retain the correct information? Provided here is a list of the most common allowable itemized deductions. Also included are tips to ensure you are given proper credit for all your valid deductions. Medical & Dental Costs Medical and Dental expenses are generally deductible to the extent they exceed 10% of your income (7.5% if age 65 or older). Some of the more common expenses: 2015 TAX RETURN Itemized Deductions for every taxpayer
- 90. • adoption • birthcontrol pills (prescribed) • doctor/dentist fees • drug/alcohol treatment • guide dog costs • handicap access devices for disabled • hospital fees • insurance premiums • prescriptions • laser eye surgery • lead based paint removal cost • life-care fees for medical treatment • Long term care ins. prem. • meals/lodging related to hospital stays • medical devices • operations • organ donation • physician diet/ health programs • psychiatric care • school and/or home for disabled • smoking cessation program cost • special life items (glasses, limbs, dentures, wheelchairs, hearing aids, contacts, etc.) • transportation (medical related) • weight loss program costs. Itemized Deductions for every taxpayer 2015 TAX RETURN
- 91. Taxes The following taxesare generally 100% deductible • property taxes • State/local taxes • payments to mandatory state funds • foreign income taxes • value based auto license fee • general state/local sales tax* * You may deduct either general state/local sales tax or state/local income tax The option of taking state income tax OR general sales taxes as an itemized deduction is not a permanent part of the tax code. Check each year to ensure this provision is still an option for you. 2015 TAX RETURN Itemized Deductions for every taxpayer
- 92. Charitable Contributions Both cashand property are generally deductible if donated to qualified organizations as: • Churches • non-profit schools • non-profit hospitals • public parks • boy & girl scouts • war/veterans groups • YMCA/YWCA • environmental/conservation groups. • agencies such as: o Red Cross, o Salvation Army, o Goodwill, CARE, o United Way, etc. 2015 TAX RETURN TIPS: All cash donations now require a bank record or receipt. Make sure you keep track of your mileage to and from the charity. It is also deductible. Only donate your vehicle to a qualified charity that uses, improves or sells the vehicle at full market value. If the charity sells your vehicle without using or improving the vehicle, your deduction is limited to the gross proceeds from the sale and not what could be a higher “fair market value”. Make sure donated clothing is in good or better condition. Itemized Deductions for every taxpayer
- 93. Casualty & TheftLosses Casualty and Theft losses are generally deductible to the extent they exceed 10% of your adjusted gross income, are not reimbursable via insurance, and each event exceeds $500. Examples include: • fire • theft • natural loss: tornado, hurricane, flood, etc. • car accident • vandalism • other accidents. Itemized Deductions for every taxpayer 2015 TAX RETURN
- 94. Most miscellaneous deductionsare only deductible to the extent they exceed 2% of your adjusted gross income. Items with an “*” are usually not subject to this income threshold. • gambling losses to offset gains* • handicapped job related expenses* • work uniforms • un-recovered annuity costs* • job hunting expenses • safe deposit box cost • tax prep fees • employee business expenses • IRA/KEOGH administration fees • business use depreciation • certain legal fees • trust administration fees • hobby expense to offset gains • 50% of business related meals; entertainment • classroom material expense for teachers • repayments of income* • repayments of Social Security • investment related expenses • in-home office expenses • job required medical exam • job required education expenses 2015 TAX RETURN Miscellaneous Deductions Itemized Deductions for every taxpayer
- 95. The following arecommon non-deductible items: • accidental damage • blood donation • club dues • commuting expenses • cosmetic surgery • drought losses • estate/gift taxes • funeral expenses • gifts to foreign organizations • gifts to “for profit” groups • gifts to individuals • home repairs • labor union donations • license fees • life insurance premiums • lost property • non-essential education • non-health related household help • health club dues • PAC donations • political donations • property assessments • raffle tickets • sales taxes (unless in lieu of state income taxes) • Soc. Sec./Medicare • tax penalties • termite/insect damage • tickets and fines Itemized Deductions for every taxpayer 2015 TAX RETURN Non-deductible Expenses
- 96. TIPS: Expense ShiftingWhenever possible shift expenses into categories of itemized deductions to surpass the IRS thresholds in a given year Miles, Miles, Miles Capture all your mileage for business travel, charitable travel and medical travel. Keep a log book in your car and note the miles to and from the doctor. Track the miles to drop off charitable donations. This area of deductible expense is often not taken or is poorly captured. Missing a few things What is deductible? What is not? When in doubt save the canceled check, the proof of payment, and receipt. Without the proof, the expense cannot be taken. No cash donations How many times have you dropped off a bag of clothes or a lamp and not keep a record of the gift? Keep a list of items you plan to give away. Put the list next to or inside the bag. The required itemization of items donated can be prepared when the bag is ready to be dropped off at your favorite charity. Donation Traps You must now have a bank statement, canceled check, or receipt for all cash donations. So, write checks to your church versus cash. Send in a check to the Salvation Army or favor charity instead of putting cash in the kettle. Itemized Deductions for every taxpayer 2015 TAX RETURN
- 97.