Accurate Bookkeeping & Tax Service, Inc.
  • Our name says it,
    our service proves it.
Banner

Personal Finance

We are dedicated to keeping clients abreast of the latest developments and tax-saving strategies. This section includes a library of hundreds of timely articles about business, taxes, finances, trends and the like. The articles are categorized by subject matter, which can be accessed from the links. Click on your topic of interest and find a wealth of information.

CHARITABLE CONTRIBUTIONS

This section explores some of the special rules that apply to charitable contributions, including deductions, non-cash contributions, car donations, etc. The latest tax law changes that were recently passed are also discussed. Use this information to help you make the most of your contributions.

more

Tax-Free IRA to Charity Distributions Reinstated
The provision that permits taxpayers age 70 and over to make direct distributions (up to $100,000 per year) from their Traditional or Roth IRA account to a charity is available for tax years 2010 through 2013. The distribution is tax-free, but there is no charitable deduction. This provision can be very beneficial to taxpayers who have social security income and/or do not itemize their deductions.

more

Special Rules for Car Donations
Congress has imposed tough rules that substantially limit the deduction for this charitable donation.

more

What is a Charitable Organization?
Money or property that you donate to "qualified" charitable organizations can be included in your itemized deductions as a charitable contribution. But what is a "qualified" charity? The IRS provides an on-line search for qualified organizations.

more

Charitable Away-From-Home Travel
Charitable deductions are allowed only for travel expenses (meals and lodging included) by volunteers who do charitable work for their organization while away from home on the charity's behalf. Unlike other areas of taxes, meals are not subject to the 50% limitation. Any "significant element of personal pleasure" negates a deduction (i.e., not even partial deduction is allowed). Significant personal pleasure is assumed if the taxpayer has only minor duties and is not required to perform any duties for the charity for major portions of the away-from-home stay.

more

Tax Breaks for Charity Volunteers
If you volunteer your time for a charity, you may qualify for some tax breaks. Although no tax deduction is allowed for the value of services performed for a charity, there are deductions permitted for out-of-pocket costs incurred while performing the services. The normal deduction limits and substantiation rules also apply.

more

Charitable Contribution Substantiation Rules
Cash Contributions - Cash contributions, regardless of the amount, must be substantiated with a bank record or written communication from the donee showing the name of the charitable organization, date and amount of the contribution.

more

Deduction Limits
Charitable deductions are limited by income depending upon the type of contribution. Contributions in excess of the deduction limits described (1), (2), and (3) below, may be carried forward for five years. An amount can be carried over even though an individual does not itemize their deductions in the year of the contribution (carryover then equals excess over 50% of AGI).

more

Foreign Charities
Generally, no deduction is permitted for contribution to a foreign charity. However, that does not include contributions to U.S. Charities that perform part of their charitable function outside the U.S. An exception to this rule is Mexican, Canadian and Israeli charities.

more

Non-Cash Contributions
When you give away household items like clothing, appliances and other goods to a qualified charity, your generosity can add up to a tax write-off if you itemize your deductions. The amount of your deduction is generally the donated property's "fair market value" (i.e., the price similar property would sell for in the open market).


more

Personal Benefits Not Deductible
Givers may deduct contributions of cash or property, but only to the extent they received no personal benefit from the donation. Often, the IRS attributes at least some (if not total) personal benefit to amounts expended for items like dinner tickets, church school tuition, YMCA dues, raffles, etc. To determine the contribution amount, subtract the FMV of the "personal benefit" item from the cost and deduct the remainder. Most charities now allocate the deductible, nondeductible portions.

more

Property Donations
In addition to noncash charitable contributions, taxpayers can make certain donations of property as outlined below.

more