Here Are the Last-Minute Tax Tips That Could Salvage Your 2014 Return

With little more than a month to go until the April 15 tax filing deadline, there are still a bunch of you out there who need all the help you can get.

With this little time left on the clock, it's tough to put together a comprehensive approach to easing your tax burden. Options such as the SIMPLE IRA, which has an October deadline for setting up an account, areoff the table. If you didn't speak with your accountant or tax preparation professional some time between the last tax deadline and now and your situation has changed, you've left yourself open to a whole bunch of nasty surprises.

“With regard to my clients, when they're approaching their tax returns I tell them to always think of their business life and their personal life, especially when they're considering last-minute deductions,” says Kimberly A. Dula, certified public accountant and partner at Friedman LLP in Marlton, N.J.

On the business end, that means not forgetting about such things as unreimbursed employee business expenses including mileage, use of cellphones and true business entertainment. Those small charges can really add up, as long as the worker making them has the foresight to keep receipts and document everything.

For the self-employed, meanwhile, Dula points out that personal health insurance is a deductible expense. She notes that many self-employed workers tend to skip that deduction, as well as the end-of-year deduction they can make to an IRA, SEP-IRA or the like.

Masood Vojdani, founder and chief executive of MV Financial, a Bethesda, Md.-based wealth management firm with $500 million in assets under management, agrees and suggests taking a look at your retirement options and seeing if any of them can bail you out.

As an employee, maximize the contribution to your company’s retirement plan," which is $18,000 for 2015, Vojdani says. "If you are over age 50, take advantage of the additional savings through the catch-up provision [$6,000 in 2015]. Also, consider using the [post-tax] Roth IRA provision in your company’s plan if allowed.”

For those who are self-employed, Vojdani suggests considering adopting a retirement plan such as a SEP IRA or solo K that allows maximum pretax contributions up of 25% of income or $52,000, whichever is less, for 2014. He also suggests that business owners as well as the self-employed consider enhanced retirement plans such as a new comparability profit sharing plan – which increases a business owner or self-employed person's contribution by up to 20% – or a cash balance plan that functions similar to a pension.

On the personal side, meanwhile, Dula notes that families in the parents work can take advantage of the dependent care credit. If they have young children who are in after-school care or day care, they can have those facilities compile payment information from the past year and use it as a deduction. Meanwhile, the tax deductions for charitable contributions – whether through partial paycheck donations or personal donations to charity walks, runs or donation centers including the Salvation Army and Habitat for Humanity's ReStore program – tend to get lost in the shuffle.

”Go back and check for those old receipts and old emails, because things like that really add up,” Dula says. “Take a quick look through your credit card statements and bank accounts and see if you're missing any of those charitable contributions.”

Dula also advises that workers not look past their state tax returns while seeking federal deductions. As she points out, several states offer deductions for contributions to 529 plans for children's college education, so it's worth the time to double-check.

“So many times there are state deductions that are forgotten because they aren't allowed for federal purposes,” she says. “Make sure that you're reading through the instructions and every line on that form to make sure you're getting state deductions that the federal return won't allow."

If you're a bit too close to retirement for any of the above to help you, all is not lost. Tim Speiss, partner and co-chairman of the New York tax practice at EisnerAmper, suggests that taxpayers who are over age 59.5 who find themselves in a lower tax bracket this year may consider taking a taxable distribution from their retirement plan, even if it is not required. If you'd rather keep your money stashed away for a while, Speiss suggests a Roth IRA conversion for your retirement plan. That would require an upfront tax hit, but it would also lock in that lower rate early while letting your post-tax investment grow.

Even folks well into their retirement can avoid Uncle Sam's prying eyes, if they were feeling charitable around the holidays.

“The law that allowed tax-free distributions from individual retirement accounts to public charities made by individuals age 70.5 and up to $100,000 had been extended through Dec. 31, 2014,” Speiss says. “The provision allowed an individual to exclude the distribution from income; thereby reducing the limitations based on a percentage of adjusted gross income and also reduced state income taxes by reducing state taxable income.”

That's all well and good for personal finances, but what about the tax burden you're leaving behind? If the potential tax implications of your estate planninghave you worried already, Speiss suggests taking advantage of the $14,000 gifts you can make to each of your heirs. Dula notes that the deadline for those gifts has passed for 2014, but that doesn't mean it isn't a great idea for 2015. While you're thinking ahead, you can also pay beneficiaries' tuition and medical expenses directly to avoid any sort of tax hit at all. Also, if you have a whole lot of extra cash weighing you down, just remember that your lifetime gift tax exclusion sits at $5.43 million in 2015. After that, the exclusion gets pegged to inflation.

Beyond that, there are just a few things you'll need to keep in mind if you don't want to be similarly stressed out by taxes next year. If you've considered selling your home, Speiss reminds you that you can come away with $500,000 tax free if you've owned it for at least two years, used it as your primary residence and haven't sold another home within those past two years.

This is also a great reminder to get your strategy in order for your 2015 filing. Vojdani implores investors to take a hit once in a while and use tax loss harvesting to offset some of the gains in their portfolios. He also advises that, if this was a big year for your portfolio, to break out those tax loss carry-forwards from the past seven years to offset capital gains. If you took it on the chin this year, let some of those losses sit a bit before using the carry-forwards to your advantage.

Finally, take a long look at your taxable investment accounts and see if adding a few low-turnover mutual funds or tax-efficient Exchange Traded Funds will keep you from getting hammered by income tax on dividends and capital gains taxes on your distribution. If this still all seems scary and confusing to you, Vojdani and Speiss humbly suggest talking to your accountant or tax advisor about your investment strategy and following up throughout the year.

It isn't the cheapest way out, but it's less expensive than the penalty for a mistake.