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.

 

 

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IRS Offers Easy-to-Use Online Tools

When you need tax help, the IRS has many online tools that are easy to use. You can e-file your tax return free, check your refund’s status or get your tax questions answered. Use our tools on IRS.gov any time of day or night. Here’s a list of popular self-help tools that millions have used to get free tax help:
• IRS Free File. You can use IRS Free File to prepare and e-file your federal tax return for free. Free File will do much of the work for you with brand-name tax software or Fillable Forms. If you still need to file your 2014 tax return, Free File is available through Oct. 15. The only way to use IRS Free File is through the IRS website.
• Where’s My Refund? Checking the status of your tax refund is easy when you use Where’s My Refund? You can also use this tool with the IRS2Go mobile app.
• Direct Pay. Use IRS Direct Pay to pay your tax bill or pay your estimated tax directly from your checking or savings account. Direct Pay is safe, easy and free. The tool walks you through five simple steps to pay your tax in one online session. You can also use Direct Pay with the IRS2Go mobile app.
• Online Payment Agreement. If you can’t pay your taxes in full, apply for an Online Payment Agreement. The Direct Debit payment plan option is a lower-cost hassle-free way to pay your tax each month.
• Withholding Calculator. Did you get a larger refund or owe more tax than you expected the last time you filed your tax return? If so, you may want to change the amount of tax withheld from your paycheck. The Withholding Calculator tool can help you determine if you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. The tool can also help you fill out the form. Give the new form to your employer to make the change.
• Interactive Tax Assistant. If you need to know about 2014 taxes, you should try the Interactive Tax Assistant tool to get what you need. If you do not have qualifying health insurance coverage, the tool can help. For instance, you can find out if you must make an individual shared responsibility payment or if you are eligible for an exemption, when you file your income tax return. You can also use the tool to find out if you are eligible for the premium tax credit.
• IRS Select Check. If you want to deduct your gift to charity, the organization you give to must be qualified. Use the IRS Select Check tool to see if a group is qualified.
• Tax Map. The IRS Tax Map gives you a single point to get tax law information by subject. It integrates your topic with related tax forms, instructions and publications into one research tool.

Top 10 Tips about Tax Breaks for the Military

If you are in the U. S. Armed Forces, special tax breaks may apply to you. For example, some types of pay are not taxable. Certain rules apply to deductions or credits that you may be able to claim that can lower your tax. In some cases, you may get more time to file your tax return. You may also get more time to pay your income tax. Here are the top 10 IRS tax tips about these rules:
1. Deadline Extensions. Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.
2. Combat Pay Exclusion. If you serve in a combat zone, certain combat pay you get is not taxable. You won’t need to show the pay on your tax return because combat pay is not part of the wages reported on your Form W-2, Wage and Tax Statement. If you serve in support of a combat zone, you may qualify for this exclusion.
3. Earned Income Tax Credit or EITC. If you get nontaxable combat pay, you can include it to figure your EITC. Doing so may boost your credit. Even if you do, the combat pay stays nontaxable.
4. Moving Expense Deduction. You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station.
5. Uniform Deduction. You can deduct the costs of certain uniforms that you can’t wear while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.
6. Signing Joint Returns. Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return.
7. Reservists’ Travel Deduction. If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.
8. ROTC Allowances. Some amounts paid to ROTC students in advanced training are not taxable. This applies to allowances for education and subsistence. Active duty ROTC pay is taxable. For instance, pay for summer advanced camp is taxable.
9. Civilian Life. If you leave the military and look for work, you may be able to deduct some job search expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.
10. Tax Help. Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after April 15.
For more, refer to Publication 3, Armed Forces’ Tax Guide. It is available on IRS.gov/forms at any time.

Inside This Issue Include a Few Tax Items in Your Summer Wedding Checklist

If you’re preparing for summer nuptials, make sure you do some tax planning as well. A few steps taken now can make tax time easier next year. Here are some tips from the IRS to help keep tax issues that may arise from your marriage to a minimum:

  • Change of name. All the names and Social Security numbers on your tax return must match your Social Security Administration records. If you change your name, report it to the SSA. To do that, file Form SS-5, Application for a Social Security Card. The easiest way for you to get the form is to download and print it on SSA.gov. You can also call SSA at 800-772-1213 to order the form, or get it from your local SSA office.
  • Change tax withholding. When you get married, you should consider a change of income tax withholding. To do that, give your employer a new Form W-4, Employee’s Withholding Allowance Certificate. The withholding rate for married people is lower than for those who are single. Some married people find that they do not have enough tax withheld at the married rate. For example, this can happen if you and your spouse both work. Use the IRS Withholding Calculator tool at IRS.gov to help you complete a new Form W-4. See Publication 505, Tax Withholding and Estimated Tax, for more information. You can get IRS forms and publications on IRS.gov/forms at any time.
  • Changes in circumstances. If you receive advance payments of the premium tax credit you should report changes in circumstances, such as your marriage, to your Health Insurance Marketplace. Other changes that you should report include a change in your income or family size. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.
  • Change of address. Let the IRS know if you move. To do that, file Form 8822, Change of Address, with the IRS. You should also notify the U.S. Postal Service. You can change your address online at USPS.com, or report the change at your local post office.
  • Change in filing status. If you are married as of Dec. 31, that is your marital status for the entire year for tax purposes. You and your spouse can choose to file your federal tax return jointly or separately each year. It is a good idea to figure the tax both ways so you can choose the status that results in the least tax.

Prepare for a Disaster – Plan to Keep Your Tax Records Safe

To mark the start of the hurricane season, the IRS urges you to make a plan to keep your tax records safe. Plans made before a disaster strikes can help you recover from the destruction left in its wake. The following tips can help you make that plan:

  • Use Electronic Records.  You may have access to bank and other financial statements online. If so, your statements are already securely stored there. You can also keep an additional set of records electronically. One way is to scan tax records and insurance policies onto an electronic format. You may want to download important records to an external hard drive, USB flash drive or burn them onto CD or DVD. Be sure you keep duplicates of your records in a safe place. For example store them in a waterproof container away from the originals. If a disaster strikes your home, it may also affect a wide area. If that happens you may not be able to retrieve the records that are stored in that area.
  • Document Valuables.  Take photos or videos of the contents of your home or business. These visual records can help you prove the value of your lost items. They may help with insurance claims or casualty loss deductions on your tax return. You should also store these in a safe place. For example, you might store them with a friend or relative who lives out of the area.
  • Count on the IRS for Help.  If you fall victim to a disaster, know that the IRS stands ready to help. You can call the IRS disaster hotline at 866-562-5227 for special help with disaster-related tax issues.
  • Get Copies of Prior Year Tax Records.  If you need a copy of your tax return you should file Form 4506, Request for Copy of Tax Return. The usual fee per copy is $50. However, the IRS will waive this fee if you are a victim of a federally declared disaster. If you just need information that shows most line items from your tax return, you can call 1-800-908-9946 to request a free transcript. You can also get it if you file Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript, or Form 4506-T, Request for Transcript of Tax Return.

Look to the IRS for Tax Help in the Event of a Disaster

June 1 marks the start of hurricane season. When a hurricane or other disaster strikes, the IRS wants you to know you can count on us for help. We can help you prepare for, and recover from, the destruction it causes. Here is some of the key disaster-related help and assistance you can get 24/7 on our IRS.gov website:
• Make a plan. Check out our IRS.gov page Preparing for a Disaster. It’s dedicated to help you plan before a disaster hits.
• Federally declared disasters. Special tax law provisions apply when the federal government declares a major disaster area. These rules can help victims recover financially after a disaster. For instance, the IRS may grant more time to file tax returns and pay tax.
• Faster refunds possible. You may be able to get a faster refund from losses suffered in a federally declared disaster area. You can claim losses related to the disaster on the tax return for the previous year. You make the claim by filing an amended return in most cases.
• Disaster declarations. Refer to Tax Relief in Disaster Situations. That page has a list of the latest disaster declarations and any related disaster tax relief.
• Around the Nation. The Around the Nation section of IRS.gov provides local tax news. It primarily includes IRS tax relief that applies to major disasters.
• Disaster relief. The IRS has many resources to help those who provide disaster relief. For more on that topic visit our page Disaster Relief Resources for Charities and Contributors.

The Affordable Care Act and Employers: Why Workforce Size Matters

The Affordable Care Act contains several tax provisions that affect employers. Under the ACA, the size and structure of a workforce – small, or large – helps determine which parts of the law apply to which employers.

The number of employees an employer had during the prior year determines whether it is an applicable large employer for the current year. This is important because two provisions of the Affordable Care Act apply only to applicable large employers. These are the employer shared responsibility provision and the employer information reporting provisions for offers of minimum essential coverage.

An employer’s size is determined by the number of its employees.

  • An employer with 50 or more full-time employees or full-time equivalents is considered an applicable large employer – also known as an ALE – under the ACA.
  • For purposes of the employer shared responsibility provision, the number of employees a business had during the prior year determines whether it is an ALE the current year. Employers make this calculation by averaging the number of employees they had throughout the year, which takes into account workforce fluctuations many employers experience.
  • Employers with fewer than 50 full-time or full-time equivalent employees are not applicable large employers.
  • Calculating the number of employees is especially important for employers that have close to 50 employees or whose work force fluctuates during the year.

To determine its workforce size for a year, an employer adds the total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each calendar month of the prior calendar year. The employer then divides that combined total by 12.

For more information, visit our Determining if an Employer is an Applicable Large Employer page on IRS.gov/aca.

Do I Need To Get A New Louisiana Will If I Have An Out Of State Will?

Legally, Louisiana law has a procedure for recognizing legally valid out of state wills. Therefore, the fact that you have an out of state will does not automatically mean that it is not valid in Louisiana.

The bigger problem with out of state wills, is that Louisiana has very unique laws when it comes to successions. Although courts will attempt to meet the intent of the deceased person’s will, that does not mean this can be accomplished easily.

There may not be any legal equivalent under Louisiana law for the bequests being given in the out of state will. The deceased person may not get the exact legal bequest they wanted in their out of state wills.

Also, the translation of legal terms from the other state to Louisiana may create ambiguity and confusion which could lead to contested issues among the legatees and heirs.

You want to make sure that your out of state last will and testament will do what you want it to do upon your death. If you have an out of state will, you should seek the advice of an experienced Louisiana estate planning attorney.

BEWARE OF FAKE IRS AGENTS!!

There has been a large number of people receiving telephone calls from persons claiming to be IRS agents, who are requesting payment of taxes. Beware of this activity. It is a scam. IRS agents will not contact you by telephone. If you owe money, IRS will demand payment by mail. Here is an article that shows the extent of this fraudulent activity.

http://finance.yahoo.com/news/fake-irs-agents-target-more-141904694.html?soc_src=mail&soc_trk=ma

If you have any tax problems, please consult an experienced tax attorney. Losavio & DeJean

Reduce Your Taxes with the Child and Dependent Care Tax Credit

The Child and Dependent Care Tax Credit can reduce the taxes you pay. If you paid someone to care for a person in your household last year while you worked or looked for work, then read on for 10 facts from the IRS about this important tax credit:

  1. Child, Dependent or Spouse. You may be able to claim the credit if you paid someone to care for your child, dependent or spouse last year.
  2. Work-Related Expense. The care must have been necessary so you could work or look for work. If you are married, the care also must have been necessary so your spouse could work or look for work. This rule does not apply if your spouse was disabled or a full-time student.
  3. Qualifying Person.  The care must have been for “qualifying persons.” A qualifying person can be your child under age 13. A qualifying person can also be your spouse or dependent who lived with you for more than half the year and is physically or mentally incapable of self-care.
  4. Earned Income. You must have earned income for the year, such as wages from a job. If you are married and file a joint tax return, your spouse must also have earned income. Special rules apply to a spouse who is a student or disabled.
  5. Credit Percentage / Expense Limits.  The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on the amount of your income. Your allowable expenses are limited to $3,000 if you paid for the care of one qualifying person. The limit is $6,000 if you paid for the care of two or more.
  6. Dependent Care Benefits. If your employer gives you dependent care benefits, special rules apply. For more on these rules see Form 2441, Child and Dependent Care Expenses.
  7. Qualifying Person’s SSN.  You must include the Social Security Number of each qualifying person to claim the credit.
  8. Care Provider Information. You must include the name, address and taxpayer identification number of your care provider on your tax return.
  9. Form 2441. You file Form 2441 with your tax return to claim the credit.
  10. IRS Free File. You can use IRS Free File to prepare and e-file your federal tax return for free. Free File is the fastest and easiest way to file your tax return. It’s only available on IRS.gov/freefile.

See Publication 503, Child and Dependent Care Expenses, for more on this topic. You can get it on IRS.gov/forms anytime.

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