Before celebrating the start of 2016, there are four must-do to-do’s regarding 2015 income taxes.

Estimate 2015 earnings and taxes paid by examining paystubs combined with any other estimated income.  Pay particular attention to stock market and mutual fund gains and losses in accounts that do not withhold income taxes.  Compare the taxes paid to the 2015 IRS tax brackets (available on www.IRS.gov).  Generally, ninety percent of taxes owed must be paid by the end of the year to avoid an under-payment tax penalty.

Got married or had a baby in 2015?  It doesn’t matter if the wedding/birth is on the first day of the year or the last. Life changes are binary in terms of taxes.  While having a baby may reduce one’s tax liability, a marriage certainly doesn’t due to things like changing filing status and the marriage penalty.  It is important to anticipate the impact of a change in filing status.

RMDs are required from retirement accounts when the participant reaches age 70½.  RMDs are also required from inherited IRAs.  For the year of the account owner’s death, the RMD amount for an inherited IRA is what the deceased account owner would have received. For subsequent years following the owner’s death, the inherited IRA RMD will depend upon whether the beneficiary elects to receive the value of the IRA in a lump sum or in payments during the beneficiary’s estimated lifetime.  Further details about RMDs are available on the IRS website.  Any RMD not taken within the corresponding calendar year may be subject to a 50% excise tax.

Any charitable contributions that will be reflected on the 2015 Income Tax Return must occur by 12/31/15.  Before donating cash to a charity, consider donating the same value in appreciated shares of stock.  Donors often get a deduction for the full market value while avoiding tax on capital gains.  A picture of non-cash donations attached to a charitable contributions receipt may help to detail what was included and can be filed with ancillary tax paperwork.
One tax-related item that doesn’t need to occur before the calendar year-end are contributions to Roth IRAs.  Those deposits can be made until April 15th for the prior tax year.  When making a ROTH deposit between Jan 1st and April 15th, the depositor designates which calendar year is applicable.

• Estimate income and taxes paid in 2015 and compare to 2015 income tax tables before 12/31/15 to avoid a tax penalty and reflect changes in filing status.
• Make RMDs from retirement accounts and inherited IRAs by 12/31/15.
• Make charitable donations for 2015 by 12/31/15.