Tag Archives: Charitable Donations

“TOYS FOR TOTS”

We are hosting a drop location for “Toys for Tots”!  Come by and drop off your toys today……………………

 

Image result for pictures of toys

 

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting. We are located in Prescott and serve all of Yavapai County, and Northern Arizona.

 


Volunteers for Charities – Tax Tips

If you volunteer for a charitable organization and you itemize your deductions, here are some tips to keep in mind:

  • Keep track of your mileage, date, and purpose of the trip.  The IRS allows you to deduct 14 cents per mile.
  • You can also deduct parking fees if applicable.
  • There are also deductions for other expenses incurred while volunteering such as the cost of stamps for a fund-raising mailing, or ingredients for making cookies for a bake sale fund raiser or for your religious organization.

 

If you have any questions about this or any other tax questions, please give us a call at 928-778-0079.

 

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting. We are located in Prescott and serve all of Yavapai County, and Northern Arizona.


2016 Changes to Arizona Tax Credits

 

Two Arizona bills (SB1216 and SB1217) have made significant changes to the Qualifying Charitable Organization and Foster Care Charitable Organization tax credits for 2016.

 

The allowable credit made to Qualifying Charitable Organizations has increased from $200 to $400 for individuals and from $400 to $800 for married couples.  The allowable credit made to Foster Care Charitable Organizations has increased from $400 to $500 for individuals and from $800 to $1,000 for married couples. These credits are now independent of each other.  Contributions for one of the credits will no longer affect the allowed credit to the other.

 

The deadline to make the contributions for the credits has been extended to April 15th of the subsequent year.  All of these changes were made after and are retroactive to January 1, 2016.

 

If you have any questions about these changes or any other tax questions, please give us a call at 928-778-0079.

 

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting. We are located in Prescott and serve all of Yavapai County, and Northern Arizona.


Tax-Exempt Church Schools – Frequently Asked Questions

As we enter tax season, important questions that have been in the back of our minds for the past year float to the surface.  Attached is an article from the American Institute of Certified Public Accountants (AICPA) addressing frequently asked questions regarding Tax-Exempt Church Schools that we would like to share with our clients.  As the season progresses, we will share these frequently asked about topics and other important accounting and tax issues as they arise, so stay tuned…..

Tax Exempt Church Schools FAQs

If you have additional questions about this post or any other, please contact us directly at 928-778-0079.

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting.  We are located in Prescott and serve all of Yavapai County, and Northern Arizona.


Charitable Solicitations – What is Required in Arizona and Other States

We have been asked by our clients where to locate information regarding laws for charitable solicitations in Arizona and other states.  Laws regulating the solicitation of funds can vary from state to state.  The IRS provides some basic information with links to other resources to answer these state by state questions. 

 

See the link below for specific information on these requirements.

 

IRS Information for Charitable Solicitations

 

If you have additional questions about this post or any other, please contact us directly at 928-778-0079.

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting.  We are located in Prescott and serve all of Yavapai County, and Northern Arizona.


Non-Cash Contributions – Have your Documentation

From Western CPE

eTax Alert™

 

Court Shows No Charity in Disallowing $37,315 of Non-cash Contributions (Kenneth Kunkel, TCM 2015-71)

Kenneth and Susan Kunkel claimed a $37,315 charitable deduction for non-cash contributions on their 2011 tax return. The Kunkels claimed to have donated property to four organizations: their church, Goodwill, Purple Heart, and Vietnam Veterans. They had no receipts, photos, or other documentation for the contributions, but claimed that they didn’t need receipts because each donation was less than $250.

What documentation is required?

$250 or more. For all contributions of $250 or more, the taxpayer generally must obtain a contemporaneous written acknowledgment from the donee (§170(f)(8)).

Less than $250. “Separate contributions of less than $250 are not subject to the requirements of Subscribe Share Past Issues Translate §170(f)(8), regardless of whether the sum of the contributions made by a taxpayer to a donee organization during a taxable year equals $250 or more” (§1.170A-13(f)(1)).

$500 or more. Additional substantiation requirements are imposed for contributions of property with a claimed value exceeding $500 (§170(f)(11)(B)).

More than $5,000. Still more rigorous substantiation requirements, including the need for a “qualified appraisal,” are imposed for contributions of property with a claimed value exceeding $5,000 (§170(f)(11)(C). “Similar items of property” must be aggregated in determining whether gifts exceed the $500 and $5,000 thresholds (§170(f)(11)(F)).

What are “similar items?” The term “similar items of property” is defined as “property of the same generic category or type,” such as clothing, jewelry, furniture, electronic equipment, household appliances, or kitchenware (§1.170A-13(c)(7)(iii)).

The court categorized similar items from Kunkel’s list of non-cash items.

Clothing – $21,920
Books – $8,000
Furniture – $3,090
Household items – $1,653
Toys – $1,072
Telescopes – $800
Jewelry – $780

No appraisals and no receipts equal no deduction.
Clearly the clothing and book donations exceeded the $5,000 value and required appraisals to properly substantiate the deduction. All other categories exceeded $250 and required receipts. The court agreed with the IRS’s disallowance of all non-cash contributions.

Tax practitioner idea. Claiming a $6,000 contribution of “household goods” would require an appraisal. Claiming a $3,000 donation of furniture and a $3,000 donation of clothing would not. Categorize the donations carefully.

 

© Vern Hoven and Sharon Kreider 

Western CPE

If you have additional questions about this post or any other, please contact us directly at 928-778-0079.

Schutte & Hilgendorf is a leading Prescott CPA firm, offering superior client service to individuals, small businesses, non-profit organizations, and homeowners associations.

Our services include accounting, bookkeeping, audit, review, tax return preparation, tax planning, payroll and QuickBooks consulting.  We are located in Prescott and serve all of Yavapai County, and Northern Arizona.


Things to Remember about Charitable Giving

All giving is valuable to those in need, but from a tax perspective, not all giving is rewarded with a tax write-off.   Here is what you need to keep in mind:

1. YOU MUST ITEMIZE FOR FEDERAL FILING TO DEDUCT CHARITABLE GIVING. You can be as generous as you want, but a tax deduction is limited to those who itemize personal deductions and forego the standard deduction amount.

2. DEDUCTIONS ARE ALLOWED ONLY FOR IRS-APPROVED CHARITIES. You cannot claim a deduction for money you give directly to individuals. Check to see that a charity is IRS-approved at www.irs.gov/Charities-&-Non-Profits/Search-for-Charities.

3. ANNUAL DEDUCTIONS ARE LIMITED WITH RESPECT TO ADJUSTED GROSS INCOME. You cannot deduct cash donations in excesss of 50% of your adjusted gross income.  Unused deductions can be carried forward for up to 5 years.

4. DEDUCTIONS REQUIRE SUBSTANTIATION. Your word or even a canceled check isn’t good enough.  If you donate $250 or more, you must obtain a written acknowledgment from the organization, specifying your gift and stating that no goods or services were received in exchange. Special rules apply for donations of vehicles.

5. SOME GIFTS REQUIRE APPRAISALS.  If you donate property valued at more than $5,000, you need a qualified appraisal.  This must be done by someone who has the credentials to be a qualified appraiser.

6. DEDUCTIONS OF APPRECIATED PROPERTY PROVIDE A DOUBLE TAX BENEFIT.  If you donate appreciated property that you have owned for more than a year, such as stock, you can deduct the value of the property on the date of the gift.  What’s more, you don’t have to report any capital gain on the appreciation; it effectively becomes tax free to you.

7. CASH DONATIONS MADE BY YEAR-END ARE DEDUCTIBLE NOW EVEN IF RECEIVED IN THE NEW YEAR. If you mail a check to the charity on December 31, it is deductible on your 2012 return, even though the charity does not receive the gift until 2013. Also, you can charge a donation to a credit card; you can take the  deduction in 2012 even if you pay the credit card bill in 2013.

8. OUT OF POCKET EXPENSES ARE DEDUCTIBLE. If you spend any money helping a charity, you can deduct those if you have substantiation. The value of your time volunteered to a charity, however, is NOT deductible. The mileage on your vehicle for driving to volunteer IS deductible at the rate of $0.14 a mile.  Be sure to keep a record of the mileage, including the date and purpose of each charitable trip.

These tips are brought to you by Schutte & Hilgendorf, PLLC, CPA’s, a Prescott firm serving the greater Yavapai County, providing audit, accounting, bookkeeping, tax preparaton and planning, Quickbooks accounting and setup, to individuals and small businesses. Contact us for a free consultation at (928) 778-0079.