Category Archives: Charitable Contributions

Cancer Charity Scam Targeting Our Soft Spots

Types of charityCancer Charity Scam Targeting Our Soft Spots

This was a well-orchestrated, insidious, cancer charity scam targeting our soft spots.  Did you contribute to The Cancer Fund of America, Cancer Support Services, the Children’s Cancer Fund of America or the Breast Cancer Society?  All are registered in Arizona and Tennessee and operated by James Reynolds Sr. and his family. This scheme goes back to 1987 and is one of the biggest charity fraud cases to ever occur in the U.S. Continue reading

Mileage Rates Deductions for Business, Charity Services and Medical Travel

OdometerMileage Deduction Rates

Studies funded by the IRS demonstrate it continues to be more expensive to drive a car.  The standard mileage deductions (or reimbursement rates) appear in the following table:

Mileage Deduction Rates 2014

Category Rate (January to December)
Business Miles 56.0 cents per mile
Charitable Services 14.0 cents per mile
Medical Travel 23.5 cents per mile

 

Source: http://www.money-zine.com/financial-planning/tax-shelter/income-tax-changes-2

Estate Planning Changes : What 2015 Looks Like

Blank CalendarWealthManagement.com provides insight to Estate Planning for 2015.

The consensus at 48th Annual Heckerling Institute on Estate Planning was that because 2014 is an election year, there’s unlikely to be any major tax reform this year. The year 2015, however, could be a different story.

Continue reading

Charitable Contributions Under the Magnifying Glass

Uncle Sam Arm holding Magnifying GlassOrganizations That Qualify To Receive Deductible Contributions

Many of us have our favorite charities that we know and have contributed to in the past.  However, not every charitable contribution is deductible – specifically – those contributions made to individuals.

Please refer to the IRS Publication 526 to get filing guidelines for tax year 2013.  They cover just about everything and include: Organizations That Qualify To Receive Deductible Contributions, Contributions You Can Deduct, Contributions You Cannot Deduct, Contributions of Property, When To Deduct, Limits on Deductions, Records To Keep, and How To Report.

A few posts back we discussed charitable contributions in Part I and Part II on Substantiating Tax Deductions for Charitable Contributions.  According to the IRS, for 2013, you may have to reduce the total amount of certain itemized deductions, including charitable contributions, if your adjusted gross income is more than:

  • $150,000 if married filing separately,
  • $250,000 if single,
  • $275,000 if head of household, or
  • $300,000 if married filing jointly or qualifying widow(er).

They also discuss Disaster relief.

“You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization (defined under Contributions) Organizations That Qualify To Receive Deductible . However, you cannot deduct contributions earmarked for relief of a particular individual or family.”

How to check whether an organization can receive deductible charitable contributions. You can ask any organization whether it is a qualified organization, and most will be able to tell you. Or go to IRS.gov. Click on “Tools” and then on “Exempt Organizations Select Check”  (www.irs.gov/Charities&NonProfits/ExemptOrganizationsSelectCheck).

This online tool will enable you to search for qualified organizations. You can also call the IRS to find out if an organization is qualified. Call 1-877-829-5500. People who are deaf, hard of hearing, or have a speech disability and who have access to TTY/TDD equipment can call 1-800-829-4059. Deaf or hard of hearing individuals can also contact the IRS through relay services such as the Federal Relay Service at www.gsa.gov/fedrelay.

The IRS has a tool that you can use to check charitable organizations.  http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check

 

Pat Michael and his team at US-TaxLaws is your best source for professional tax preparation services with more than 30 years experience and thousands of satisfied clients.

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & Trusts Estate Planning   Bookkeeping   Payroll

 

 

 

 

 

 

 

 

http://us-taxlaws.com/wp-content/uploads/2014/03/IRS-Publicatim-526-Charitable-Contributions.pdf

Part II Tips : Substantiating Tax Deductions for Charitable Contributions

Bradford Tax Institute
The Bradford Tax Institute is one of the many sources we network with to stay on top of all the latest changes and updates to tax code and laws.

KEEP GOOD RECORDS!

When you give to charity, you win twice, first by supporting good organizations, and second by claiming valuable tax deductions. We leave the choice of charitable entity to you, and instead focus on record-keeping practices that maximize your charitable contribution deductions. To deduct cash, check or other charitable gifts, keep bank records or written communication from the charity showing

  • the name of the charitable organization,
  • the date of the contribution, and
  • the amount of the contribution.

For a detailed guide on record-keeping based on amount and type of charitable contribution, see the table at the end of this article.

Personal v. Business Deductions

Personal charitable deductions alleviate your tax burden and add to your bottom-line. However, business deductions are more valuable than personal charitable deductions.

Thus, whenever you have a choice between a business and a personal deduction, go for the business deduction.

For example, with a business deduction on Schedule C of your Form 1040, you save both self-employment taxes, and phaseout taxes caused by a multitude of AGI limits.

If you operate as a corporation, you gain with charity payments as business expenses because you are using pre-tax money for the charity rather than after tax deductions.

Here’s one corporate owner example. Say you are going to give $10,000 to a charity. If you earn the money on a W-2 in your capacity as an owner-employee, you pay payroll taxes on the earnings before you can give the $10,000 to the charity. On the other hand, if your corporation can claim the $10,000 payment to this charity as a business expense, you avoid the payroll taxes and either you (if you are an S corporation) or the corporation (C corporation) gets the deduction.

Souce: Bradford Tax Institute

Pat Michael and his team at US-TaxLaws is your best source for professional tax preparation services with more than 30 years experience and thousands of satisfied clients.
Call us today 619-589-8680.

Personal Tax Preparation   Business Tax Preparation   Partnership Tax Preparation Corporate Tax Preparation  Incorporation-Choice of Entity   Business Support Services Corporate Compliance   Audit Representation  Retirement Tax Planning   Wills & Trusts Estate Planning   Bookkeeping   Payroll

Part I : Tips Substantiating Tax Deductions for Charitable Contributions

SUBSTANTIATING CHARITABLE CONTRIBUTIONS

Larger IRSMany charitable organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with section 170. Most eligible organizations are listed in Exempt Organizations Select Check (Pub 78 database). Continue reading