Married or Single

The IRS looks at what your status is on December 31st to determine whether or not you are married for that tax year. If you are married, you can file jointly which usually will save you money. The IRS recognizes common-law marriage if the state where you live does. Same sex couples are not considered married for federal tax purposes even if state law approves of such marriages.

401(k) Contributions- How much should you do??

The answer is you should do the maximum which is $16,500 for those under 50 and $22,000 for those 50 and older. Many companies have matching programs that put money in your retirement plans based on your contribution. It is like getting a raise. The 401(k) contribution is deducted from your paycheck which is not a good thing, but it also comes off your taxable compensation which is a wonderful thing. Any money earned in your 401(k) account is tax free. You do pay taxes on the funds when you pull them out for retirement. Making 401(k) contributions is one of the easiest and best tax planning ideas out there.

Tax Preparation Fees

Tax preparation fees are deductible as a miscellaneous itemized deduction. However they are subject to a 2% of adjusted gross income haircut so it might not be beneficial. A reasonable portion of the fee can be deducted on a rental or business schedule though which will usually end up reducing your taxes.

Giving away Gifts to Family and Friends

You can give up to $13,000 this year to anyone without having any gift tax consequences. You don't have to pay gift tax or file a gift tax return, and the person who receives it doesn't have to report it on their income tax return. You can give up to $26,000 from a joint account and all of the above still holds true. You can give $26,000 away from your own individual assets, and if your spouse agrees to split the gift with you, then the only thing you have to do is file a gift tax return reporting the gift but no gift taxes will be due. This is one of the best estate planning tools for those with large estates.