IRS Audit Process, IRS Tax Problems, Uncategorized

How Do You Give Back? Is it Deductible?

May 31, 2013 - IRS Audit Process, IRS Tax Problems, Uncategorized

As long as I can remember I have celebrated Memorial Day. I LOVE to fly my American Flag! I remember celebrating holidays during he week, not just on designated Mondays. We celebrated the holiday on what we considered was the actual or official holiday date. Things change. My memory seemed a little faded since grade school. I wanted to learn a little more so I did some research. Just like when I research tax law, I found answers to some of my questions.   I was surprised to find that Memorial Day was first celebrated after our Civil War. It was after this same Civil War that the Enrolled Agent, my professional designation, was also first recognized.   In researching this holiday I found confirmation that we really did celebrate this day on May 30th. I was surprised to see that we once celebrated this holiday on May 5th. Now that I live in Arizona, we celebrate the Mexican holiday, Cinco de Mayo, on May 5th. Things change.   My father, like his brothers and so many other great people, served our military in World War II. I remember one of my aunts talking about Decoration Day. I didn’t really understand it as a child. It was the day Americans decorated the graves of soldiers. Decoration Day is now called Memorial Day. Things change.   One Memorial Day before my father died, I thanked my father for his service. I appreciated his sacrifice.  He didn’t say much. I asked him if he had ever been thanked before. He said, “No.” But his expression seemed to say, “Why would anyone thank me? This is what we did then.”   So for all who served, for all who are serving now, and for those yet to serve, I thank you for your service. My gratitude for you all will not change.   How do you serve? Who do you serve? There are many ways to serve, many organizations to serve.   What does this have to do with taxes? Taxes change every year. I am glad we still have a deduction for Gifts to Charity. This category includes organizations whose purpose is religious, charitable, educational, scientific or literary. Contributions also include organizations that work to prevent cruelty to children and to animals. Of course veteran’s groups are part of these qualified charitable organizations.   I am serious when I tell my clients, “Don’t let the tax laws rule your life.” Yes, pay attention to the tax laws. but live the way you wan to live.   You can give to whoever you want. But if you want to deduct what you give, you’ll want to be sure your organization (not an individual) can provide you with verification of their charitable status. You can check the status of your charity at www.irs.gov/charities or call the IRS Customer Service at 1-877-829-5500.   What can you deduct? Contributions can be money (cash, check, payments by credit card), property (new or used) and out-of-pocket (meaning you paid it with your own money) expenses you paid to do volunteer work for a qualifying charitable organization. Keep track of the miles you drive, parking and tolls, for your volunteer work. Don’t deduct any amount that was repaid to you.   If you want to deduct any gift of $250 or more, you need to have a statement from your organization before you file your tax return. This statement needs to show how much money you gave, or the description of the property you gave, AND whether or not you received any goods or services in return. If you did receive something back, this statement must state the value of what you received. I’ll talk about deducting non-cash contributions in another blog.   These days, so many people are listening to radio station WIIFM, What’s In It For Me? How do you give?  I was a Girl Scout. I lived near Lake Michigan and got a Red Cross Life-Saver certification. I played viola in my school orchestra. I still sing in my church’s choir.   How do you contribute? How do you give back? Our most precious resource is our time. But the value of our time is not deductible.   If you have questions about what you want to deduct, post a comment. This could be a great discussion.   Always to your lowest legal tax,   Nellie T Williams, EA