This time of the year, meaning March 2015, many San Francisco Bay Area clients are getting ready for taxes! Given the fact that 2014 was a financially better year for many people, many people are awakening to the fact that they will actually have to pay more taxes than in years past. We at safe harbor are always looking for ways to minimize the bite of state and federal taxes.
In this month’s lively San Francisco Tax Tips newsletter, we have an interesting article about above the line tax deductions. Leaving aside the tax jargon, you may not realize that some types of expenses occur before your modified adjusted gross income is calculated. In simple terms these deductions reduce your income in a very direct way.
Above the Line Deductions for San Francisco Bay Area Taxpayers
Among them are the following. First and foremost, contributions to individual retirement accounts and other types of retirement accounts can become above the line deductions against your state of California and federal taxes. Secondly, many types of health related expenses also qualify. For example health savings accounts and self-employed health insurance can also count. Finally, alimony to a former spouse can sometimes also qualify as Kim job-related moving expenses.
Taxes are always complicated, but with a little planning, you can really optimize your strategy. We work with many high income San Francisco residents to plan out their tax strategy throughout the year. So that in the crunch of March or April, we are not in panic mode. Rather, we are strategically looking at the previous year, with the satisfaction that we have minimized our taxes through many wonderful strategies, including above the line deductions. Give our office a call if you are interested in planning for 2015; we service many San Francisco residents from our convenient Gary location.