Charitable contributions made to qualified organizations may help
lower your tax bill. The following tips will help ensure your contributions pay off on your tax return. Always consult your tax professional regarding your specific situation.
1. If your goal is a legitimate tax deduction, then you must be
giving to a qualified organization. Also, you cannot deduct
contributions made to specific individuals, political organizations and
candidates. See IRS Publication 526, Charitable Contributions, for rules
on what constitutes a qualified organization. 2. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. 3. If you receive a benefit because of your contribution such as
merchandise, tickets to a ball game or other goods and services, then
you can deduct only the amount that exceeds the fair market value of the
benefit received. 4. Donations of stock or other non-cash property are usually valued
at the fair market value of the property. Clothing and household items
must generally be in good used condition or better to be deductible.
Special rules apply to vehicle donations. 5. Fair market value is generally the price at which property would
change hands between a willing buyer and a willing seller, neither
having to buy or sell, and both having reasonable knowledge of all the
relevant facts. 6. Regardless of the amount, to deduct a contribution of cash,
check, or other monetary gift, you must maintain a bank record, payroll
deduction records or a written communication from the organization
containing the name of the organization, the date of the contribution
and amount of the contribution. For text message donations, a telephone
bill will meet the record-keeping requirement if it shows the name of
the receiving organization, the date of the contribution, and the amount
given. 7. To claim a deduction for contributions of cash or property
equaling $250 or more you must have a bank record, payroll deduction
records or a written acknowledgment from the qualified organization
showing the amount of the cash and a description of any property
contributed, and whether the organization provided any goods or services
in exchange for the gift. One document may satisfy both the written
communication requirement for monetary gifts and the written
acknowledgement requirement for all contributions of $250 or more. If
your total deduction for all non cash contributions for the year is over
$500, you must complete and attach IRS Form 8283, Non cash Charitable
Contributions, to your return. 8. Taxpayers donating an item or a group of similar items valued at
more than $5,000 must also complete Section B of Form 8283, which
generally requires an appraisal by a qualified appraiser.
For more information on charitable contributions, visit http://www.irs.gov or call (800-829-3676).
Always consult your tax professional regarding your specific situation.
You know you are a tax nerd if: 1. At your wedding on December 31, you insisted that the photographer
take a picture of you exchanging vows in front of the Big Ball in Times
Square to prove to the IRS that you got married before midnight.
2. On April 15th you keep moving west as you prepare income tax returns so as to extend the filing deadline by three hours.
3. When you finish preparing a return, instead of saying 10 4 over and out, you say 1040 completed and filed.
4. You insisted that your daughter Katie pay kiddie tax on her lemonade stand income.
5. You consider a Rabbi Trust an example of a reputable clergy person.
6. You think a tax table is where deals are cut with the IRS.
7. You think that any person who masters the Internal Revenue Code is entitled to a Lifetime Learning Credit.
8. You think Batman collects taxes for the Commissioner.
9. Whenever you explain a QTIP, you give your client an earful.
10. You think that people who get paid under the table use the cash method of accounting.
11. You keep changing your mind when asked if you recommend creating a revocable trust.
12. You think people who create disregarded entities lack self confidence.
13. You equate the office of the IRS Taxpayer’s Advocate to the fox watching the hen house.
14. You think of an IRS furlough day as a tax holiday.
15. You think those who are careless with their tires should be subject to a flat tax.
If you are registered
for sales and use tax purposes in New York State, you must file sales and use
tax returns. We’ll explain the sales tax filing requirements for quarterly,
part-quarterly (monthly), and annual filers, including the E-file mandate.
The need to collect sales tax in New York is predicated upon having a physical connection with the state. This is a concept known as nexus. Nexus is a latin word that means "to bind or tie" and it stands as the deciding factor for whether the New York Department of Taxation and Finance has the legal authority to require your business to collect, file, and remit sales tax.