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December 2015


by Andrew D. Schwartz, CPA

It's not too late to cut your 2015 tax bill. Prior to December 31st:

  • Increase your 401(k) and 403(b) contributions if you haven't been contributing at the maximum rate all year.  This year you can put up to $18,000 into your 401(k) or 403(b) plan at work.  Anyone 50 or older by December 31st can put away an additional $6,000.  Contributing to a 401(k) or 403(b) plan at work is one of the best tax shelters available to you during your working years.  (You might also start thinking about setting your 2016 retirement savings goals too.)

  • If you’re self-employed, consider setting up a Solo 401(k) by 12/31.  A Solo 401(k) plan lets a self-employed person hit the $53k retirement plan max with less income than a SEP IRA, and also allows a person aged 50 or older to put away $59k into a retirement plan for 2015 versus $53k into a SEP IRA.

  • Take a look at your withholdings and instruct your employer to withhold additional taxes to avoid getting hit with an underpayment penalty if you haven’t had enough taxes withheld during the year.  (Take a look at the IRS' Withholding Calculator to set your withholdings for 2016.)

  • Consider selling your investments held in non-retirement accounts that have decreased in value since your capital losses can offset other capital gains realized during the year (including from your mutual funds).  Excess losses can then be used to offset up to $3,000 of wages and other income.  Make sure to wait at least 31 days before buying back a security sold at a loss, or the IRS will disallow the loss under the "wash sale" rules.

  • Consider selling your investments that have increased in value if you are in the lowest tax bracket since the capital gains rate for you will be 0%.  You can then buy back those securities, and the "cost-basis" will be the higher amount.  This strategy will save you taxes down the road when you sell these securities.  Just make sure that the capital gains realized don't push you out of the 15% tax bracket, or you'll be taxed on those gains that fall outside that bracket at 15%.

  • Send in your January 2016 mortgage payment early enough so it will be processed prior to 12/31/15.  By sending in your payment a few weeks early, you can deduct the interest portion of that payment a full year earlier.

  • Clean out your closets and donate your clothing and household items to a charitable organization, since "non-cash" contributions are deductible if you itemize.  Don’t forget to get a receipt.  And you should make a list of each item donated, along with its condition, and snap a few photos as well.  Remember, only donations of clothing and household items in "good condition or better" qualify for a deduction.  (To track what you donate, download our Non-Cash Contribution Worksheet - Excel Version  or the PDF version.)

  • For gifts of money, making your donation by credit card before December 31st allows you to deduct the donation on this year's return, even if you don't pay your credit card bill until 2016.  And you always have the option of donating appreciated investments to charities. You get to claim your donation based on the value of the assets donated, without paying any capital gains taxes on the appreciation.  (Use this IRS tool to confirm a charity as legitimate.)

  • Pre-pay your projected state tax shortfall if you'll be itemizing your deductions and not subject to the alternative minimum tax.  Due to the higher tax rates enacted for 2014, there is a better chance that you won't get hit by the AMT this year than prior to 2013.

  • Pre-pay and pay off your medical bills if your total medical expenses exceed 10% of your income and you itemize.  Please note that this threshold remains at 7.5% for people over the age of 65 while the threshold for everyone increased from 7.5% to 10% back in 2013.

And, as always, evaluate whether you'll save any taxes by postponing 2015 income or deductions into 2016 or by accelerating 2016 income or deductions into 2015.

Got questions about year-end tax planning?  If so, please contact the closest MDTAXES CPA.



by Andrew D. Schwartz, CPA

On November 6th, my CPA firm held a great meeting for our medical and dental practice owners.  As one of the sessions, I presented a variety of tips and suggestions on how healthcare professionals in practice can better utilize QuickBooks for their bookkeeping.  My presentation included a:

27-page handout on QuickBooks 2015 Tips.

What I've found over the years is that I teach my firm's clients to download and/or input their transactions into QuickBooks, and then to classify these transactions as best they can as they are added to the appropriate bank or credit card register. 

Most of these clients, however, don't know why they are doing what we've taught them to do.  And even fewer know how to generate meaningful reports from their QuickBooks data, which at the end of the day is one of the primary reasons to go through the effort of maintaining QuickBooks.

My QuickBooks Tips focuses on these 4 areas:

  • Understanding the Accounting Basics

  • Maintaining the Vendor List

  • Managing Transactions

  • Generating Reports

Please download this guide and play around with your QuickBooks as you learn to utilize these valuable tips. Don't worry about messing up your QuickBooks, since everything within QuickBooks can always be fixed.  That being said, you should probably make a backup of your QuickBooks data file before you start playing around with the data too much in case you make such a mess that it would be easier to start over than to fix the mess. (And please don't change any data from before January 1st, since that info was reported to the IRS as part of your tax returns.)

If you are struggling with your QuickBooks and want a private lesson, we can arrange a time for a remote session for a reasonable fee using GoToMeeting. Please email me at for more info. I'd love help you out.



by Bob Cahill, Sr. Mortgage Banker, Leader Bank NA

With the first Fed rate increase since 2006 expected in mid-December, 30 year fixed mortgage rates have already risen by roughly .25% - to 3.875-4.00% - in anticipation of such an increase.  At this time, only a horrific jobs report in early December will derail a .25% increase in the Federal Funds Target Rate from .25% to .50%. This increase should push up financing costs across the board, including home equity lines of credit (HELOC) and mortgage rates.  The impact will limit what we all can pay for housing and other discretionary items.

Many believe that we’re looking at 30 year fixed rates to be in the 4.25% to 4.75% range by the end of 2016.  If mortgage rates jump an anticipated worst case 1%, a typical housing payment will be about 10% higher assuming home prices stay the same.  This increased cost will most likely not affect demand much at the upper-middle and upper classes, because those buyers will most likely find a way to purchase if the time is right and they can find a home that meets their goals.  However, this may adversely impact first time buyers that may not have the additional monthly cash flow to support a higher payment.


$500k purchase with 20% down





















The roughly 10% increased cost assessment for a 1% rate increase assumes that prices will not be affected by higher interest rates, and this is as big a question as the interest rate unknowns.  Some believe there’s still enough demand relative to supply that prices can continue to climb with higher rates, but if economic activity slows, the impact on prices can of course cool home appreciation and possibly even soften prices.  It’s my expectation that with years of extremely low rates and stimulus that’s unprecedented, we will continue to see small appreciation in prices even in a slightly higher interest rate market.

So the question really is, how do buyers and sellers manage what they can control?  My perspective is that the only thing we can control is how we react… For buyers with two unknowns, namely interest rates and prices, the focus needs to be on understanding what your budget can afford, and then finding the right property within that budget. 

The budget task is pretty straight forward but does require time to objectively and subjectively think about your future.  Finding the right property might still be the bigger challenge with the current market still favoring sellers.  One positive of higher rates for buyers might be a slight reduction in demand which might help ease the multiple bid competition that we've been seeing, and allow you to land the home you’ve been seeking.  Another potential positive for buyers might be reduced prices, but this will most likely take some time for the affordability factors to pan out.  Sellers on the other hand will have the same budget and financial planning effort, but the added task of determining their future purchase plans.

In summary, I believe the housing market will continue to appreciate, but at a more modest pace and a closer balance between a seller and buyer’s market will be achieved.  I also suggest leveraging the financial, tax and mortgage planning, and real estate resources available to you so you can better plan your next sale and/or purchase.  Remember, rates back in 2013 crept up by almost 1% to ~4.50% and although demand softened, most buyers that purchased with a higher rate have since realized lower refinance costs and rates, and higher current values.  This is why I believe the fundamental driving reason behind buying or selling is more dependent on what’s right for your personal situation and financial budget.

You can reach Bob Cahill at for a no obligation consultation at any time.  -  781-589-8756 -

Bob Cahill,Sr. Mortgage Banker, Leader Bank N.A.

781-589-8756, 877-509-6614 (secure efax)

(NMLS # 449250) (NMLS LO# 485042)



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Income Taxes

Saving and Investing




  • 4th quarter state estimates should be paid by 12/31 for people who itemize their deductions and won't be hit by the AMT.
  • Keogh plans and Solo 401(k)'s must be established by 12/31
  • 529 Plans must be funded by 12/31 to take full advantage of this year's gift limit of $14,000. 
  • Last chance to maximize annual contributions to your 401(k) or 403(b) plan of up to $18,000, ($24,000 if 50 or older).


2015 & 2016 TAX FACTS

  • For 2015, the standard deduction for a single individual is $6,300 and for a married couple is $12,600. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes), real estate taxes, mortgage interest, charitable contributions, and unreimbursed employee business expenses.
  • For 2015, the personal exemption is $4,000. Individuals will claim a personal deduction for themselves, their spouse, and their dependents. 
  • The maximum earnings subject to social security taxes is $118,500 for 2015 and 2016, up from $117,000 in 2014.
  • The standard mileage rate is $.575 per business mile as of January 1, 2015, up from $.56 for 2014.
  • The maximum annual salary deferral into a 401(k) plan or a 403(b) plan is $18,000 in 2015 and 2016, up from $17.5k in 2014.  And if you'll be 50 or older by December 31st, you can contribute an extra $6,000 into your 401(k) or 403(b) account this year, up from $5,500 last year.
  • The maximum annual contribution to your IRA is $5,500 for 2014 and 2015.  And if you turn 50 by December 31st, you can contribute an extra $1,000 that year.  You have until April 15, 2016 to make your 2015 IRA contributions.


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This Month's Topics

Ten Tips to Cut Your 2015 Taxes

Awesome QuickBooks Tips

Cahill's Commentary:  What A Buyer And Seller Might Consider With Higher Interest Rates Expected In 2016

The FICA Refund for Medical Residents 

2015 & 2016 Tax Facts

Tax and Financial Planning Calendar for December 2015


Browse our index of previous months' newsletter topics

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In a shocking development, the IRS recently announced that they will be honoring the FICA tax refunds submitted by residency programs and individual doctors.  The catch is that only FICA taxes paid prior to 4/1/05 qualify.

For more information, go to our April 2010 Newsletter, our January 2009 Newsletter, or our February 2001 Newsletter or read through the IRS' Chief Counsel Advice Memorandum on this issue.

Let's work together to keep current on this hugely valuable tax break.  Please post whatever you read or hear regarding this FICA issue on our new Message Board we set up just for this topic.


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