IRS Audit, Money, Thanksgiving

Internal Revenue Service Takes Another Holiday!

November 20, 2013 - IRS Audit, Money, Thanksgiving

What holiday you ask? I’m talking about the totally American holiday of Thanksgiving Day. Why is this so American?  I did a little research for you. In representing a client in a tax case I must often research tax law. I learned a lot that I hadn’t know before in researching the history of Thanksgiving. How much of this did your already know? In 1621, the Pilgrims and some of the members of the Native American Wampanoag tribe came together to celebrate a successful harvest. They feasted for three days on fowl and deer and berries and most likely boiled pumpkin and plums. Mmmm. By 1777, all thirteen colonies celebrated a day of thanksgiving. In 1789, President George Washington declared a day of public thanksgiving and prayer. We were forming a new nation and establishing a new constitution and this was cause for the new national holiday and annual day of celebration. President Abraham Lincoln issued a proclamation in 1863 declaring the last Thursday in November to be a day of thanksgiving and praise. He wanted a way to bring our nation together after our Civil War. Climbing out of our Great Depression, in 1939 President Franklin D Roosevelt heard the merchants’ cry. The last November Thursday in 1939 fell on November 30th. And that only left 24 days to shop for Christmas. So FDR moved Thanksgiving to the second Thursday in the month. There was a lot of confusion and controversy around the new “Franksgiving”, but the shopping wasn’t really affected. (Deductible Gift giving was the subject of earlier blogs. Do you want me to address tax deductions of gifts again? Leave me a comment and let me know.) Congress passed a law on December 26, 1941 declaring Thanksgiving would be held every year on the fourth Thursday of November. This year that date is November 26th. We will have only 26 days until Christmas Eve. Most American’s will celebrate this family holiday. You are hard-pressed to take a tax deduction. But it can be done. Are you a restaurant or cafe or other eating establishment in the business of feeding people? Then you’ve got business income and business expenses. Keep track of those numbers. Most people will spend this day with their family. But are you throwing a business event on the holiday? If so, what business will you be discussing? Have your guests sign the guest book so you can prove who you were entertaining. And of course, keep your receipts. Maybe you will volunteer your time to help out at your local charity dining hall. You may not deduct the value of your time. But if you gave a turkey, or other items for the banquet, keep your receipts for what you spent AND get a letter of acknowledgement from the charity. Chances are you did some driving. If you made a special shopping trip for the charity, or if you drove to the dining hall to volunteer your time, keep track of those miles. Charitable miles are deductible at 14 cents per mile. You can choose not to track those miles. But if you don’t keep that mileage log, you don’t get to claim the deduction. One more thing. The day after Thanksgiving is called Black Friday. Why? Because that is traditionally the busiest holiday shopping day of the year. Many retailers’ profits move from the “red” to the “black” on Black Friday. I am grateful for all that I have. Everyday I thank God for my new day. I hope you have a blessed day of giving thanks.