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Claim Haiti Donations as Tax Deductions on Your 2009 Return

If you are donating to charities providing earthquake relief in Haiti, you may be able to claim those donations on your 2009 tax return. Here are 10 important facts the Internal Revenue Service wants you to know about this special provision.

1. A new law allows you to claim donations for Haitian relief on your 2009 tax return, which you will be filing this year.

2. The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.

3. To be eligible for a deduction on the 2009 tax return, donations must be made after Jan. 11, 2010 and before March 1, 2010.

4. In order to be deductible, contributions must be made to qualified charities and can not be designated for the benefit of specific individuals or families.

5. The new law applies only to cash contributions.

6. Cash contributions made by text message, check, credit card or debit card may be claimed on your federal tax return.

7. You must itemize your deductions in order to claim these donations on your tax return.

8. You have the option of deducting these contributions on either your 2009 or 2010 tax return, but not both.

9. Contributions made to foreign organizations generally are not deductible. You can find out more about organizations helping Haitian earthquake victims from agencies such as the U.S. Agency for International Development ( www.usaid.gov).

10. Federal law requires that you keep a record of any deductible donations you make. For donations by text message, a telephone bill will meet the record-keeping requirement if it shows the name of the organization receiving your donation, the date of the contribution, and the amount given. For cash contributions made by other means, be sure to keep a bank record, such as a cancelled check or a receipt from the charity. Receipts should show the name of the charity, the date and amount of the contribution.

(From IRS Special Edition Tax Tip 2010-01)

Should you have questions regarding this post or any other tax needs, contact us at Schutte & Hilgendorf, PLLC, Prescott accountants serving the greater Yavapai County with tax, accounting, auditing, and QuickBooks consulting expertise.

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IRS Reminds all Tax-Exempt Organizations to File Form 990 on Time to Preserve Tax Exempt Status

WASHINGTON — The Internal Revenue Service today reminded tax-exempt organizations to make sure they file their annual information form on time. In 2010 the tax-exempt status of any non-profit that has not filed the required form in the last three years will be revoked.

The Pension Protection Act of 2006 requires that non-profit organizations that do not file a required information form for three consecutive years automatically lose their Federal tax-exempt status. This requirement has been in effect since the beginning of 2007.

A list of revoked organizations will be available to the public, as well as state charity and tax officials on this website.

If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.

Form 990-series returns and e-Postcards, are due by the 15th day of the 5th month after an organization’s tax year ends.

(From IRS Issue Number IR-2010-010)

Contact us today for assistance filling the appropriate return for your tax-exempt organization.

Should you have questions regarding this post or any other tax needs, contact us at Schutte & Hilgendorf, PLLC, Prescott accountants serving the greater Yavapai County with tax, accounting, auditing, and QuickBooks consulting expertise.

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Eight Tips to Help Your Choose a Tax Preparer

The IRS urges people to use care and caution when choosing a tax preparer. Remember, you are legally responsible for what’s on your tax return even if it was prepared by an another individual or firm.

Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Therefore, it’s important to find a qualified tax professional.

The following tips will help you choose a preparer who will offer the best service for your tax preparation needs.

  1. Check the person’s qualifications Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
  2. Check on the preparer’s history Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys.
  3. Find out about their service fees Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.
  4. Make sure the tax preparer is accessible Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.
  5. Provide all records and receipts needed to prepare your return Most reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
  6. Never sign a blank return Avoid tax preparers that ask you to sign a blank tax form.
  7. Review the entire return before signing it Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
  8. Make sure the preparer signs the form A paid preparer must sign the return as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return.  The preparer must also give you a copy of the return.

(Taken from IRS Tax Tip 2010-06)

Should you have questions regarding this post or any other tax needs, contact us at Schutte & Hilgendorf, PLLC, Prescott accountants serving the greater Yavapai County with tax, accounting, auditing, and QuickBooks consulting expertise.

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Three Reasons to Prepare and File Your Taxes Electronically

Last year, 2 out of 3 tax returns were filed electronically. Was yours? If not, here are three important reasons to e-file your return.

  1. It’s fast Your tax return will get processed more quickly if you use e-file. If there is an error on your return, it will typically be identified and can be corrected right away. If you file electronically and choose to have your tax refund deposited directly into your bank account, you will have your money in as few as 10 days.
  2. It’s safe The IRS is fully committed to protecting your tax information and e-filed returns are protected by the latest technology. In 20 years, nearly 800 million e-filed returns have been processed safely and securely by the IRS.
  3. It’s time Don’t miss out on the benefits of e-file, 2 out of 3 taxpayers, 95 million, already get the benefits of e-file.

(Taken from IRS Tax Tip 2010-07)

Should you have questions regarding this post or any other tax needs, contact us at Schutte & Hilgendorf, PLLC, Prescott accountants serving the greater Yavapai County with tax, accounting, auditing, and QuickBooks consulting expertise.

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