Tuesday, November 24, 2015

IRS Tax Tips For Deducting Gifts To Charity

The holiday season often prompts people to give money or property to charity. 

If you plan to give and want to claim a tax deduction, there are a few tips you should know before you give. For instance, you must itemize your deductions.

Here are six more tips that you should keep in mind:

1. Give to qualified charities. You can only deduct gifts you give to a qualified charity. Use the IRS Select Check tool to see if the group you give to is qualified. You can deduct gifts to churches, synagogues, temples, mosques and government agencies. This is true even if Select Check does not list them in its database.

2. Keep a record of all cash gifts.  Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return. This is true regardless of the amount of the gift. The statement must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, or bank, credit union and credit card statements. If you give by payroll deductions, you should retain a pay stub, a Form W-2 wage statement or other document from your employer. It must show the total amount withheld for charity, along with the pledge card showing the name of the charity.

3. Household goods must be in good condition.  Household items include furniture, furnishings, electronics, appliances and linens. These items must be in at least good-used condition to claim on your taxes. A deduction claimed of over $500 does not have to meet this standard if you include a qualified appraisal of the item with your tax return.

4. Additional records required.  You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements.

5. Year-end gifts.  Deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2015. This is true even if you don’t pay the credit card bill until 2016. Also, a check will count for 2015 as long as you mail it in 2015.

6. Special rules.  Special rules apply if you give a car, boat or airplane to charity. If you claim a deduction of more than $500 for a noncash contribution, you will need to file another form with your tax return. Use Form 8283, Noncash Charitable Contributions to report these gifts. For more on these rules, visit IRS.gov.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Additional IRS Resources:
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IRS Podcasts:

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IRS Raises Tangible Property Expense Threshold To $2,500; Simplifies Filing And Recordkeeping

WASHINGTON —The Internal Revenue Service today simplified the paperwork and recordkeeping requirements for small businesses by raising from $500 to $2,500 the safe harbor threshold for deducting certain capital items.

The change affects businesses that do not maintain "an applicable financial statement" (i.e., don't regularly produce audited financial statements).  It applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item.  For taxpayers with an applicable financial statement (i.e. audited financial statements), the de minimis or small-dollar threshold remains $5,000.

The new $2,500 threshold applies to any such item substantiated by an invoice. As a result, small businesses will be able to immediately deduct many expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions.

As before, businesses can still claim otherwise deductible repair and maintenance costs, even if they exceed the $2,500 threshold.
The new $2,500 threshold takes effect starting with tax year 2016. In addition, the IRS will provide audit protection to eligible businesses by not challenging use of the new $2,500 threshold in tax years prior to 2016.

Further details on this change can be found in Notice 2015-82, posted today on IRS.gov.


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Monday, November 16, 2015

When Does My Business Need In-House Counsel ?

You need in-house counsel when calling your outside counsel becomes inefficient. 

Maybe you are spending too much on fees and having an employee makes more sense. Or maybe your business is growing and you just need a trusted counselor to talk to whenever issues arise.


There are many reasons that you might want a lawyer on hand. But of course hiring another employee is always a serious consideration and this one is particularly important. Your in-house lawyer has to be able to do all kinds of things and switch hats with ease.

Smart Suit, Many Hats
Attorneys are not only useful for lawsuits. In fact, when you keep counsel on staff, you want to find a lawyer with an expansive approach, a flexible thinker. It helps to have a smart suit around the office, a hired gun to call your own, but only you know what you most need. So make a list of skills you would like this person to have.
There are all types of lawyers -- from the stiff to the super cool. If you find the right person, your in-house lawyer should be able to handle everything from contract negotiation and review to regulatory research and licensing, communicating with accountants or doing the taxes, entertaining big clients, and more.
A good attorney can research and execute, finding out what needs to be done and doing it. Your lawyer will not know everything. But a counselor should be able to confidently handle any question after research and offer you wise direction.

Not Mutually Exclusive
Hiring in-house counsel means you have someone around all the time to handle your matters. But that doesn't mean you will never need any other lawyer again. Depending on the circumstances, you may need to bring in specialists.
An in-house lawyer helps with that, finding the right representatives for a particular problem. Counsel will manage cases and represent the firm as a knowledgeable client.
It may sound funny, but it can help to have your lawyer speak to your other lawyers on your behalf. All are trained to frame issues legally and will have an easier time exchanging and making wise decisions. Plus, you will have a translator, someone devoted to communicating the issues and conveying your point of view.





AttorneyBritt Offers Part-Time In-House Counsel Services For Those Companies Not Quite Ready For A Full-Time In-House Counsel.  For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.

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Thursday, November 12, 2015

The Budget Act Of 2015 Dramatically Changes Partnership And LLC Tax Audits Requiring Changes To Partnership Agreements And LLC Operating Agreements TODAY !!


Last week, President Obama signed H.R. 1314, the Bipartisan Budget Act of 2015 (the “Legislation”), which dramatically changes the manner in which partnerships (and LLC’s taxed as partnerships) are audited and taxed by the IRS. The Legislation is effective for tax years beginning on or after January 1, 2018, but partnerships may elect to be subject to the new rules immediately. 

  • If you currently have a partnership or an LLC taxed as a partnership, you need to consider amending the partnership agreement or LLC operating agreement to ensure that the partnership can elect out of these new rules or addresses how to cause the partnership to have the partners, past and present, equitably share any partnership level tax liability.

  • If you are considering investing in partnership or LLC taxed as a partnership, you need to negotiate provisions in the partnership agreement or LLC operating agreement that make you whole with respect to federal income tax liabilities paid by the partnership on account of an IRS audit of 2018 or later years for which you should properly have no liability.

For help with your legal needs contact a business, tax, and health care law attorney at the offices of AttorneyBritt.

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Plan Now To Use Health Flexible Spending Arrangements In 2016; Contribute Up To $2,550; $500 Carryover Option Available To Many

 

WASHINGTON ― The Internal Revenue Service today reminded eligible employees that now is the time to begin planning to take full advantage of their employer’s health flexible spending arrangement (FSA) during 2016.


 
FSAs provide employees a way to use tax-free dollars to pay medical expenses not covered by other health plans. Because eligible employees need to decide how much to contribute through payroll deductions before the plan year begins, many employers this fall are offering their employees the option to participate during the 2016 plan year.
Interested employees wishing to contribute during the new year must make this choice again for 2016, even if they contributed in 2015. Self-employed individuals are not eligible.
An employee who chooses to participate can contribute up to $2,550 during the 2016 plan year. Amounts contributed are not subject to federal income tax, Social Security tax or Medicare tax. If the plan allows, the employer may also contribute to an employee’s FSA.
Throughout the year, employees can then use funds to pay qualified medical expenses not covered by their health plan, including co-pays, deductibles and a variety of medical products and services ranging from dental and vision care to eyeglasses and hearing aids. Interested employees should check with their employer for details on eligible expenses and claim procedures.
Under the use or lose provision, participating employees often must incur eligible expenses by the end of the plan year, or forfeit any unspent amounts. But under a special rule, employers may, if they choose, offer participating employees more time through either the carryover option or the grace period option.
Under the carryover option, an employee can carry over up to $500 of unused funds to the following plan year—for example, an employee with $500 of unspent funds at the end of 2016 would still have those funds available to use in 2017. Under the grace period option, an employee has until 2½ months after the end of the plan year to incur eligible expenses—for example, March 15, 2017, for a plan year ending on Dec. 31, 2016. Employers can offer either option, but not both, or none at all.
Employers are not required to offer FSAs. Accordingly, interested employees should check with their employer to see if they offer an FSA. More information about FSAs can be found in Publication 969 , available on IRS.gov.  

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