Nine Tips on Deducting Charitable Contributions

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Giving to charity may make you feel good and help you lower your tax bill. The IRS offers these nine tips to help ensure your contributions pay off on your tax return.

  1. If you want a tax deduction, you must donate to a qualified charitable organization. You cannot deduct contributions you make to either an individual, a political organization, or a political candidate.
  2. You must file Form 1040 and itemize your deductions on Schedule A. If your total deduction for all non-cash contributions for the year is more than $500, you must also file Form 8283, Non-cash Charitable Contributions, with your tax return.
  3. If you receive a benefit of some kind in return for your contribution, you can only deduct the amount that exceeds the fair market value of the benefit you received. Examples of benefits you may receive in return for your contribution include merchandise, tickets to an event, or other goods and services.
  4. Donations of stock or other non-cash property are usually valued at fair market value. Used clothing and household items generally must be in good condition to be deductible. Special rules apply to vehicle donations.
  5. Fair market value is generally the price at which someone can sell the property.
  6. You must have a written record about your donation in order to deduct any cash gift, regardless of the amount. Cash contributions include those made by check or other monetary methods. That written record can be a written statement from the organization, a bank record, or a payroll deduction record that substantiates your donation. That documentation should include the name of the organization, the date and amount of the contribution. A telephone bill meets this requirement for text donations if it shows this same information.
  7. To claim a deduction for gifts of cash or property worth $250 or more, you must have a written statement from the qualified organization. The statement must show the amount of the cash or a description of any property given. It must also state whether the organization provided any goods or services in exchange for the gift.
  8. You may use the same document to meet the requirement for a written statement for cash gifts and the requirement for a written acknowledgement for contributions of $250 or more.
  9. If you donate one item or a group of similar items that are valued at more than $5,000, you must also complete Section B of Form 8283. This section generally requires an appraisal by a qualified appraiser.

If you have any questions you can call us at our office, 314-993-4285.

FAQs on Disaster Recovery Income and Deductions

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The states of Louisiana and Mississippi are responding to the recent flooding first with guidance on disaster recovery payments and income taxes.  This guidance alerts us to their state revenue bulletins for details on these programs.  Our prayers continue to be with you and your families.

From CCH State Tax Review, Vol 77, Issue 35:

The Louisiana Department of Revenue provided answers to frequently asked questions about personal income tax aspects of disaster recovery payments and income. Among other things, the answers addressed donations to or payments from a”GoFundMe” or other crowdfunding website; time spent as a volunteer; providing living space and meals for displaced persons; donating clothing, food, household goods, or other similar items; records required to substantiate a charitable deduction; casualty and theft losses for damaged or destroyed homes, household items, and vehicles; mitigation or qualified disaster relief payments; FEMA payments; and insurance payments. Revenue Information Bulletin No. 16-048, Louisiana Department of Revenue, August 22, 2016

The Mississippi Department of Revenue has announced that it will follow federal extensions granted to Louisiana residents directly affected by the severe storms and flooding that took place on August 11, 2016. Taxpayers residing in Louisiana counties designated as federally declared disaster areas have until January 17, 2017 to file individual income, corporate income and pass-through entity tax returns due on or after August 11, 2016, and before January 17, 2017. The department automatically provides interest and penalty relief on original or extended filing and payment due dates, including extended filing or payment due dates, that fall within the postponed period. Therefore, taxpayers residing in affected Louisiana counties do not need to contact the department to get relief. Relief does not provide an extension for payments on prior liabilities. Notice 80-16-003, Mississippi Department of Revenue, August 18, 2016

If you have any questions or would like guidance on this matter, please contact our office at 314-993-4285.

IRS Offers Tips on Charity Travel

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Do you plan to donate your time to charity this summer? If you travel for it, you may be able to lower your taxes. Here are some tax tips from the IRS that you should know about deducting charity-related travel expenses:

  • Qualified Charities.  To deduct your costs, you must volunteer for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are generally qualified, and do not need to apply to the IRS. Ask the group about its status before you donate.
  • Out-of-Pocket Expenses.  You may be able to deduct some of your costs including travel. They must be necessary while you are away from home. All  costs must be:
    • Unreimbursed,
    • Directly connected with the services,
    • Expenses you had only because of the services you gave, and
    • Not personal, living or family expenses.
  • Genuine and Substantial Duty.  Your charity work has to be real and substantial throughout the trip. You can’t deduct expenses if you only have nominal duties or do not have any duties for significant parts of the trip.
  • Value of Time or Service.  You can’t deduct the value of your time or services that you give to charity. This includes income lost while you serve as an unpaid volunteer for a qualified charity.
  • Travel You Can Deduct.  The types of expenses that you may be able to deduct include: air, rail, and bus transportation; car expenses; lodging costs; cost of meals, and; taxi or other transportation costs between the airport or station and your hotel.
  • Travel You Can’t Deduct.  Some types of travel do not qualify for a tax deduction. For example, you can’t deduct your costs if a significant part of the trip involves recreation or vacation.

If you have any questions please do not hesitate to give us a call at our office, 314-993-4285.

This information was received from IRS Tax Tips Issue “IRS Summertime Tax Tip 2016-12”

The Benefit of Donating Your Required IRA Distributions to Charity

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Under Qualified Charitable Distribution (QCD) rules, an IRA can make a contribution directly from the IRA to a charity. The donation is not claimed as a deduction, though the distribution from the IRA is not reported in income, either. In fact, since the IRA itself is a pretax account, contributing directly from an IRA to a charity is the equivalent of a “perfect” pretax contribution.

Read more information about QCD rules and the discussion of donating to charity directly from your IRA at the Wall Street Journal:

http://blogs.wsj.com/experts/2016/07/04/the-benefit-of-donating-your-required-ira-distributions-to-charity/

University City Children’s Center

The University City Children’s Center (UCCC) is one of our company’s favorite charities. The UCCC, a non-profit, early childhood education center in St. Louis, has served our community for over 40 years and continues to impact children and families in new, different, and meaningful ways. In 2016, the Center, along with LUME Institute, has contributed to early childhood education in groundbreaking ways. These include: developing the first registered apprenticeship program in the country for early childhood educators with the US Department of Labor, called the Early Childhood Career Pathway Apprenticeship Program; presenting metrics demonstrating LUME’s model of early childhood education to the US Department of Health and Human Services Administration for Children and Families in Washington, DC; and creating one of the only Early Childhood Mental Health Consultation Model programs in the state of Missouri. Check out their website to learn more information, including how you can contribute to the tuition assistance program and partner with UCCC and LUME Institute to continue to work on closing the achievement gap.

www.uccc.org

As a reminder, a donation to the University City Children’s Center qualifies for a 50% Missouri tax credit in addition to the normal donation deductions. If you have any questions, please call our office, 314-993-4285.

Tax News for Arizona

Charitable Contribution Credit Amounts Increased

The amounts that may be claimed as Arizona personal income tax credits for voluntary cash contributions to qualifying charitable organizations and qualifying foster care charitable organizations are increased, applicable to taxable years beginning after December 31, 2015. The credit cap for contributions to qualifying charitable organizations is increased from $200 to $400 for individuals and from $400 to $800 for married couples. The credit cap for contributions to qualifying foster care charitable organizations is increased from $400 to $500 for individuals and from $800 to $1000 for married couples. A taxpayer may receive separate tax credits for voluntary cash contributions to a qualifying charitable organization and to a qualifying foster care charitable organization during the same taxable year.

Arizona House Approves IRC Conformity Date Update and Partnership Return Changes

The Arizona House of Representatives has approved a bill that would update the state’s conformity to the Internal Revenue Code (IRC) for corporate and personal income tax purposes for taxable years beginning after 2015. The Senate also approved the bill. References to the IRC would be updated to mean the IRC as in effect on January 1, 2016, including those provisions that became effective during 2015, with the specific adoption of all federal retroactive effective dates. The bill would clarify some of the federal provisions that are effective for prior taxable years.

For taxpayers that qualify for the federal exclusion from gross income for civil damages, restitution, or other monetary award for wrongful incarceration, the bill would specify a deadline for filing an amended state return claiming a refund due to the exclusion and a deadline for the Department of Revenue to review the amended return. The bill would also change the partnership return filing due date from the 15th day of the fourth month following the close of the tax year to the 15th day of the third month following the close of the tax year.

In addition, the bill would specify reporting and payment requirements for when a partnership is audited by the Internal Revenue Service and is assessed an imputed underpayment pursuant to IRC §6225, or when a partnership makes the election under IRC §6226 with respect to an imputed underpayment. (As passed by the Arizona House of Representatives on May 7, 2016).

If you have any questions, don’t hesitate to call us at the office, 314-993-4285.

*This information was received from CCH Federal Tax Weekly.*

Join us on May 5 for Give STL Day!

It’s on! Once again, the Angel Band Project is participating in Give STL Day.

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Give STL Day is a big, bold opportunity for our community. A partnership between the Greater Saint Louis Community Foundation and local nonprofits from across the area, Give STL Day is an online day of giving where nonprofits like the Angel Band Project will be reaching out to their donors – and looking for new ones – as they educate the community about their mission and raise operating funds. They raised $3,590 last year, and Give STL Day generated a total of $1.1 million for the 528 participating nonprofits.

Local impact with a national twist. Like last year, the Angel Band Project will be joining more than 100 communities across the country to raise millions of dollars for the greater good—all on a single day.

Everyone can be a philanthropist. On May 5, we’re asking every person in the St. Louis area to get behind this effort and give. Large and small gifts will combine for big impact— it’s time to think big.

Single day, lasting impact. All the funds raised will benefit participating nonprofits right here in our hometown. It’s time to be bold.

Local investment, effective solutions. The Greater Saint Louis Community Foundation is spearheading Give STL Day and is celebrating its centennial throughout 2015. Its professional staff is knowledgeable about local needs and effective organizations, and all funds raised will benefit known and trusted local nonprofits.

A virtual event with a personal touch. The Give STL Day website will make giving easy, safe and fun. By visiting givestlday.org on May 5, you can designate gifts to the organization(s) of your choice that are doing essential work in our community. At the same time, you can help the Angel Band Project raise essential support and earn matching funds.


Visit www.givestlday.org for additional details, and don’t forget to give on May 5!

Stroll Against Silence!

 

We’re back with information on another great charity event hosted by The Angel Band Project: Stroll Against Silence!

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Stroll Against Silence is a community and team fundraising event where you can either be the fund-raiser or the fund-giver (or even both!).

“The evening will honor survivors and remember victims of sexual violence, raise public awareness about this silent issue, educate communities on how to prevent and work together against sexual violence and will have live music and fun activities throughout its entirety!…There will be one hour of 6 different themed laps during the night… Games, food, music and other activities will provide entertainment and build camaraderie. In addition, it’s a family-friendly environment for the WHOLE community.”

If you are interested in either donating to this amazing cause or building your own team, head on over to https://www.firstgiving.com/AngelBandProject/stroll-against-silence. Here you will be able to register as a walker or donate funds to specific teams! No matter which team you choose, your donation supports The Angel Band Project’s cause.


If you would like to learn more about The Angel Band Project you can check out their website at http://angelbandproject.org/ or our other blogs about this charity and the work that they do here and here.

It’s Your Last Chance to Participate In Our Putting Tournament!

svdplogoOur “Putting and Pampers” tournament benefitting the Society of St. Vincent de Paul is coming to a close… and right now the competitors are neck-and-neck!

Tied for First Place with 15 points we have: Phil Alicea and Todd Robbins.

Tied for Second Place with 14 points we have: Norm Eaker and Ed Lynch.

The pot is currently at a total of $290, meaning $145 goes to Saint Vincent de Paul and $145 goes to the winner!

You have until April 5th to participate in the tournament for your chance to win! It’s just $10 to play and show that you are the Top Dog!

While our putting tournament is all fun and games… Bill and Barbara Kruse have been working diligently to gather diaper and baby wipe donations for St. Vincent de Paul. We would love for an influx of diapers to come in between now and April 5th!

A mound of diapers!

All of the baby wipes and diapers that Bill and Barb have collected so far!

 

To learn more about St. Vincent de Paul, please go to their website at https://svdpstlouis.org/