55790711 260019154942680 8457086437255983412 n

Attention S Corp Business Owners Are You Paying Yourself a Reasonable Sa...

Have you thought about any last minute actions for this years taxes You ...

If you are in a solid position financially, a good way to use the tax co...

With tax reform many taxpayers have not adjusted their tax payments corr...

If your itemized deductions are slightly less than the standard deductio...

Year end tax planning Have you ever thought about pre paying your state ...

A Thanksgiving Thank You!

Year end tax planning tip: Are you paying outstanding medical or dental ...

Legitimate Tax-Deductible Charity or Scam?

Articles Highlights: 

• Holiday Giving 
• Scammers and How to Avoid Them 
• Verifying Legitimate Charities 
• Substantiation 
• Special Situations 

With the holiday season approaching, and with the great need for aid in the wake of the recent hurricanes and wildfires, you no doubt are being solicited for donations. However, do not be fooled by the scammers who come out from hiding whenever there is a disaster and during the holiday season. The last thing you want to do is get ripped off; not only will your charitable dollars go to waste, but you will also lose your tax deduction, as contributions are only tax-deductible if they are made to qualified charities. 

Soon, your physical and electronic mailboxes – not to mention your voicemail box – will be filled with charitable solicitations. Before you break out your checkbook, however, be sure to do your homework, especially if you are contemplating a donation to an organization that you are not already familiar with. The Federal Trade Commission suggests avoiding any charity or fundraiser that 

• refuses to provide detailed information about its identity, mission, and costs, as well as how your donation will be used; 
• will not provide proof that your contribution would be tax-deductible; 
• uses a name that closely resembles that of a better-known (more reputable) organization; 
• thanks you for a pledge that you do not remember making; 
• uses high-pressure tactics to get you to donate immediately; 
• asks for donations in cash or asks you to wire money; or 
• offers to send a courier or overnight delivery service to collect a donation immediately. 

Numerous websites can help you to check the validity of a charity. The IRS provides one, but it is rather cumbersome to use. Charity Navigator allows you to search for a charity name and provides details about that charity’s function. When in doubt, take the time to verify a charity’s legitimacy. 

If you plan to itemize your deductions – after you have determined that you are not contributing to a scam operation – ensure that your charitable donations meet the requirements for being tax-deductible. The recipient organization must be one or more of the following: 

• a church, synagogue, mosque, or other place of worship; 
• a tax-exempt educational institution or hospital; 
• a federal, state, or local governmental unit, if the contribution is used for public purposes; 
• a publicly supported corporation, trust, fund, foundation, or community chest that is organized and operated only for charitable, religious, educational, scientific, or literary purposes; to prevent cruelty to children or animals; or to foster certain national or international amateur sports competitions; or 
• a certain type of private operating foundation or agricultural research organization. 

Substantiation – First and foremost, you must receive substantiation of your cash gift in order to deduct it on your tax return; you also must itemize your deductions rather than use the standard deduction. Cash contributions include those paid by cash, check, electronic fund transfer, and credit card. However, you cannot deduct a cash contribution, regardless of the amount, unless you can document the contribution in one of the following ways: 

1. A bank record that shows the qualified organization’s name, as well as the date and amount of the contribution. Eligible bank records include a. a canceled check, b. a bank or credit union statement, or c. a credit card statement.
   
2. A receipt (or a letter or other written communication) from the qualified organization showing the organization’s name, as well as the date and amount of the contribution. 

Cash contributions of $250 or more – To claim a deduction for a contribution of $250 or more, you must provide a written acknowledgment of the contribution from the qualified organization. This acknowledgment must include the following details: 

1. The amount of cash contributed
   
2. Whether the qualified organization gave the taxpayer goods or services (other than certain token items and membership benefits) as a result of the contribution, including a description and good-faith estimate of the value of those goods or services (not counting intangible religious benefits)
   
3. A statement that you received no benefit (other than an intangible religious benefit) 

The value of any goods or services received in exchange for a donation must be subtracted from the amount claimed as a contribution. If the acknowledgment does not show the date of the contribution, then you must also supply one of the bank records described above to verify the contribution date. If this acknowledgment includes the contribution date and meets the other requirements, it is not necessary to provide other records. 

The acknowledgment must be in your hands before the date you file your tax return but not later than the April due date for return (or the extended due date of October if you filed an extension). 

Christmas Kettles – It is quite common for charitable organizations to collect cash donations at malls during the holiday shopping season. Consider writing a check to place in these kettles rather than using cash so that you will have the substantiation required for a tax-deductible contribution. 

Needy Individuals – You may wish to help out a needy family; although that is a very kind thing to do, no charitable deduction is allowed for such gifts to private individuals (either directly or as through a charitable organization). 

GoFundMe – Through this website (and others like it), people raise funds for good causes such as starting a business, paying medical bills or funeral costs, replacing damaged or destroyed homes. However, these websites are not qualified charities for the purposes of claiming a charitable contribution on your tax return. 

Special Contribution Rule for Taxpayers Age 70½ and Over – The tax code includes a special provision that allows taxpayers who are at least 70½ years old to directly transfer up to $100,000 from an IRA account to a qualified charity. Instead of receiving a charitable deduction, that person instead gets the benefit of the IRA distribution being nontaxable and counting toward the required minimum distribution for the year. This is especially beneficial for people who receive Social Security benefits and those who take the standard deduction. Although this is generally considered a good tax-saving strategy for those who can afford to make large donations, there is actually no minimum for this rule, so it will likely even benefit individuals in lower tax brackets. 

Bunching – When taxpayers’ itemized deductions are only marginally different from the standard deduction, they can consider the method known as bunching. In this technique, the taxpayer make two years’ worth of donations in a single year and then skips making donations in the next year. For example, if you annually contribute $5,000 to a house of worship but have total itemized deductions that are consistently a few hundred dollars less than the standard deduction, you can instead double up by donating $10,000 in a single year. That way, you will be able to claim itemized deductions for the year when you make the donation and can then take the standard deduction in the following year. 

For large donations, there are limitations based on adjusted gross income, and there are other available techniques, such as donor-advised funds. This article also did not covered donations of noncash items, such as used furniture or household goods; these have additional substantiation requirements. Please call if you have questions or if you would like to set up an appointment to strategize about maximizing the tax benefits of your charitable contributions.

Important steps to protect your business from embezzlement

https://t.co/FW53yGTNb6

#IFTTT https://t.co/FW53yGTNb6

— ASCEND (@ASCENDTA) October 10, 2018

Source: @ASCENDTA October 10, 2018 at 01:13PM
More info Your Website/Page Anchor Text Here

We Can Help!

When You Should Amend A Tax Return

Got Healthcare?

Affordable Care Act open enrollment is underway now through Dec. 15. Despite Republican efforts to repeal and replace it, Obamacare is still the law. If you don't have acceptable health insurance, use the ACA enrollment time to get a policy in place or so that you avoid a penalty at tax time! Get Covered!

We Can Help!

Business owners juggling too much - let Ascend Tax & Accounting ease some of the burden!

The Latest from the IRS on Identity Theft

From the IRS' Summertime Tax Tip Series comes an article packed with information on how to protect yourself from Identity Thieves.

Eight Tips to Protect Taxpayers from Identity Theft

Identity theft happens when someone steals personal information for financial gain. Tax-related identity theft happens when someone uses another person’s stolen Social Security number (SSN) or Employer Identification Number (EIN) to file a tax return to obtain a fraudulent refund.

Many people first find out they are victims of identity theft when they submit their tax returns. That’s because the IRS lets them know someone else already used their SSN to file.

The IRS continues to work hard to stop identity theft with a strategy of prevention, detection and victim assistance. So far, the agency has stopped millions of dollars from getting into the hands of thieves.

Check out these eight tips on how to protect against identity theft:

1. Taxes. Security. Together. The IRS, the states, and the tax industry need everyone’s help. The IRS launched The Taxes. Security. Together. awareness campaign in 2015 to inform people about ways to protect their personal, tax and financial data. Learn more at www.IRS.gov/TaxesSecurityTogether.

2. Protect Personal and Financial Records. Taxpayers should not carry their Social Security card in their wallet or purse. They should only provide their Social Security number if it’s necessary. Protect personal information at home and protect personal computers with anti-spam and anti-virus software. Routinely change passwords for online accounts.

3. Don’t Fall for Scams.  Criminals often try to impersonate banks, credit card companies and even the IRS hoping to steal personal data. Learn to recognize and avoid those fake communications. Also, the IRS will not call a taxpayer threatening a lawsuit, arrest or to demand immediate payment. Beware of threatening phone calls from someone claiming to be from the IRS.

4. Report Tax-Related ID Theft. Here’s what taxpayers should do if they cannot e-file their return because someone already filed using their SSN:

• File a tax return by paper and pay any taxes owed.
• File an IRS Form 14039, Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. Include it with the paper tax return and/or attach a police report describing the theft if available.
• File a report with the Federal Trade Commission using the FTC Complaint Assistant.
• Contact Social Security Administration at www.ssa.gov and type in “identity theft” in the search box.
• Contact financial institutions to report the alleged identity theft.   
• Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on the affected account.
• Check with the applicable state tax agency to see if there are additional steps to take at the state level.

5. IRS Letters. If the IRS identifies a suspicious tax return with a taxpayer’s stolen SSN, that taxpayer may receive a letter asking them verify their identity by calling a special number or visiting an IRS Taxpayer Assistance Center.

6. IP PIN. If a taxpayer is a confirmed ID theft victim, the IRS may issue them an IP PIN. The IP PIN is a unique six-digit number that the taxpayer uses to e-file their tax return. Each year, they will receive an IRS letter with a new IP PIN.

7. Report Suspicious Activity. If taxpayers suspect or know of an individual or business that is committing tax fraud, they can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

8. Service Options. Information about tax-related identity theft is available online. The IRS has a special section on IRS.gov devoted to identity theft and information for victims to obtain assistance.

For more on this Topic, see the Taxpayer Guide to Identity Theft.

Avoid scams. The IRS does not initiate contact using social media or text message. The first contact normally comes in the mail. Those wondering if they owe money to the IRS can view their tax account information on IRS.gov to find out.

Additional IRS Resources:

• Publication 5027, Identity Theft Information for Taxpayers
• Publication 5199, Tax Preparer Guide to Identity Theft
• Publication 4524, Security Awareness-Identity Theft Flyer
• Publication 4523, Beware of Phishing Schemes
• Tax Topic 101, IRS Services – Volunteer Tax Assistance, Outreach Programs, and Identity Theft
• IRS Tax Map, Identity Theft