Controversial Charitable Contribution Regulation Withdrawn

This past September, the IRS proposed a regulation that would require charitable organizations to collect personal information from its donors and file information returns with the IRS with this personal information for donations over $250. The IRS would, in turn, would use informational returns received from the donee to match the amounts with the social security numbers of the donors.

A few days ago, we received notice that the IRS has scrapped these regulations. (whew!) This could have only led to more paperwork for non-profit organizations and greater risks for individuals to become victims of identity theft.

As a reminder, the IRS still requires contemporaneous written acknowledgement of a contribution from a charitable organization if the donation exceeds $250.  The acknowledgement must state the amount of cash or a description (but not the value) of property other than cash contributed. The letter must also state whether the donee provided any “goods or services” in consideration for the contribution. Lastly, if the goods or services received were entirely intangible religious benefits, the letter must provide a statement to that effect.

For more information on charitable contributions, please contact Paul Glantz, CPA at paul@launchconsultinginc.com

 

Five Tax Strategies Now for Refunds in April

As the year winds down, there is nothing more important than discussing year-end tax strategy. Building communication between yourself, your CPA, and your investment advisor will guarantee you are a winner come April 15. Far too often, poor decision making and bad planning will lead to a big bill from the IRS. I’ve compiled a list of five powerful tips you can use now to help reduce your tax bill next year.

  1. If you had any big losers in the market this year, consider “realizing” these losses, and preserving your investment position by purchasing back that same security 31 days later.
  2. Consider using a credit card to pay deductible expenses before the end of the year. The IRS operates on the “year of swipe” principle. So while you will not receive the bill for these expenses until 2016, you can benefit from the deduction in 2015.
  3. Apply strategy to your itemized deductions. In some states, and cities (like Austin, Texas), you can make your property tax payment between October and January. If planned correctly, you can double your real estate tax deduction every other year, while still taking advantage of the standard deduction for in-between years.
  4. Defer income and accelerate your deductions. Ask your boss to hold on to that year-end bonus until January or have your employer bump up your last few 401k contributions. Other strategies for accelerating your deductions include increasing the amount you set aside for next year’s FSA or, if eligible, make a full years worth of HSA contributions before December 1, 2015.
  5. If you made a Traditional to Roth IRA conversion earlier in the year, and the value of the assets has since declined, you could wind up paying a higher tax than necessary. You can combat this by backing out of the transaction, and re-characterizing the conversion. Later, you can reconvert to a Roth.

Stay tuned for more tax planning tips as we wait for information on any “extender legislation” for temporary tax rules set to expire Dec 31.

For more information on year end planning, contact Paul Glantz, CPA at paul@launchconsultinginc.com

 

IRS still holding over $1 Billion in federal tax refunds

With the April 15, 2015 individual tax deadline rapidly approaching, I want to remind everyone that your 2014 taxes aren’t the only returns you should be thinking about. If you neglected to file your Form 1040 from the 2011 tax year,  the final deadline to file for a refund is also this April 15th. After this date, the money will become the property of the U.S. Treasury.

The IRS released a notice that they are holding over $1  billion in federal tax refunds, this is money that belongs to the taxpayer and you could be missing out on your last chance to collect! Some people are under the assumption that they didn’t make enough money to file, others are students or part time employees, either way, you may still may be entitled to a refund.

For more information please contact Paul at paul@launchconsultinginc.com

or visit the IRS website for the official press release.