Posts tagged donations
What would you do to help when a disaster hits someone you know?
Oct 22nd
One of our clients, 3Fold Communications, faced that very situation Thursday, October 21. A nonprofit client of theirs, River City Food Bank, based in Sacramento, CA, faced a devastating emergency. A fire destroyed the organization’s building and everything in it.
The food bank, which served nearly 750 people weekly, lost between 8,000-10,000 pounds of food in the fire. In addition, they lost office furniture, computers, and general supplies. This was a true disaster for an important service within the community.
But the community rallied to handle the problem. With the assistance of 3Fold, the organization got the word out about their invaluable services in need of serious help. They let the community know exactly what had happened, and that the monetary and non-perishable food donations were needed asap.
A number of Sacramento’s other food bank operators stepped in to temporarily ensure that River City’s clients get the assistance they need. One of the city’s biggest health care providers is giving them new temporary space to work in, larger than what they previously had. An office supply store is letting River City pick out new furniture for their administration offices. An insurance provider in the region stepped in with a donation of seven computers. And a number of other organizations, businesses and individuals responded generously with donations of food, money and gift cards.
All in less than twenty-four hours, proving communities can come together in amazing ways in times of crisis.
Would you do the same? Would you put your day, your work day, your entire business’s work day on hold if you could possibly help in a traumatic situation?
Ten Tips for Taxpayers Making Charitable Donations
Aug 26th
IRS Summertime Tax Tip 2010-21 http://bit.ly/aVjA6r
Did you make a donation to a charity this year? If so, you may be able to take a deduction for it on your 2010 tax return.
Here are the top 10 things the IRS wants every taxpayer to know before deducting charitable donations.
- Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. You can also check IRS Publication 78, Cumulative List of Organizations, which lists most qualified organizations. IRS Publication 78 is available at IRS.gov.
- Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.
- You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.
- If your contribution entitles you to receive merchandise, goods, or services in return – such as admission to a charity banquet or sporting event – you can deduct only the amount that exceeds the fair market value of the benefit received.
- Be sure to keep good records of any contribution you make, regardless of the amount. For any contribution made in cash, you must maintain a record of the contribution such as a bank record – including a cancelled check or a bank or credit card statement – a written record from the charity containing the date and amount of the contribution and the name of the organization, or a payroll deduction record.
- Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September but paid the charity only $200 by Dec. 31, your deduction would be $200.
- Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.
- For any contribution of $250 or more, you must have written acknowledgment from the organization to substantiate your donation. This written proof must include the amount of cash and a description and good faith estimate of value of any property you contributed, and whether the organization provided any goods or services in exchange for the gift.
- To deduct charitable contributions of items valued at $500 or more you must complete a Form 8283, Noncash Charitable Contributions, and attached the form to your return.
- An appraisal generally must be obtained if you claim a deduction for a contribution of noncash property worth more than $5,000. In that case, you must also fill out Section B of Form 8283 and attach the form to your return.
For more information see IRS Publication 526, Charitable Contributions, and for information on determining value, refer to Publication 561, Determining the Value of Donated Property. These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
Links:
- Publication 78, Cumulative List of Organizations
- Publication 526, Charitable Contributions ( PDF)
- Publication 561, Determining the Value of Donated Property ( PDF)
Financial Benefits of Decluttering
Jul 23rd
I have been in a decluttering mode lately. It was sparked by moving my mom from her three-bedroom home to a one-bedroom apartment in my house — and having to pare down her belongings. Spending weeks going through all her stuff to figure out what she did and didn’t need (then selling and donating the unneccesary items) made me want to remove all the clutter from my life, too. A few articles I recently read fueled this desire even more.
My husband and I usually go through our closet once a year to clear out clothes we no longer wear. But an article in the New York Times about people who decided to wear only six items for a month made me aware that there still is a lot in my closet that I don’t need.
We occasionally go through other closets, cabinets and drawers to rid them of items that don’t get used and just take up space. After reading G.E. Miller’s 3 Guerilla Tactics to Get Rid of Clutter on 20somethingfinance, I realized my haphazard keep-or-toss tactics weren’t cutting it.
What resonated with me most, though, was a reader comment on the Opinionator blog post How to Lose a Legacy. The reader wrote about cleaning out his (or her) parents’ home after his mother died and father moved out: “I wonder why we (me) hang on to stuff that really just takes up physical and emotional “room” in our lives; I s’pose it’s because the “stuff” (as George Carlin so aptly and comically put it) signifies a longing to hang on to, or dare I say, cling, to memories using physical things … even if we actually wish we could just throw a lot of it in the trash.”
It feels good to get rid of the clutter. This is a personal finance column, so I won’t advocate just throwing your stuff in the trash because you’d miss out on the financial benefits of decluttering. Here’s what getting rid of things you don’t need can do for your finances:
To read the rest of this article by Cameron Huddleston, Contributing Editor to Kiplinger.com, please go to http://bit.ly/aHXTs8
Congress is Driving Us Crazy
Jan 27th
There are a couple new tax and financial planning issues affecting our clients for the 2009 tax season, so be aware:
1. Every disaster needs a new tax law…apparently.
We, like the rest of the world, were saddened by the tragedy of the Haiti earthquake, and, like so many, were inspired to donate what we could. As accountants, however, we also realized this created a new issue for the upcoming tax season. They do make tax planning a challenge. For an analysis of deducting Haiti donations made in 2010 on your 2009 tax return, look at page 3 of our newsletter. This is hot off the government presses and doesn’t apply to any of the other worthwhile causes out there.
2. Another developing issue: if you’ve worked diligently with your attorney to develop an estate plan, congratulations, that plan may now be useless — at least for the time being.
As of January 1, 2010 the estate tax has been temporarily repealed. Don’t worry, though; it comes back as of January 1, 2011. Congress may extend the tax retroactively, but who knows. You may want to contact your attorney to see if a fix to your plan is warranted.
There may be more retroactive tax laws to follow, so stay tuned!
On a more positive note, wouldn’t it be nice if the Kansas Legislature actually considered and passed a repeal of the Kansas Income Tax? I understand that other taxes would be expanded to cover the shortfall, but I am growing tired of Kansans moving to Texas, Florida or Nevada to avoid the Kansas Income Tax. Even boring accountants can dream.
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