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Friedman, TC Memo 2010-45
In a recent Tax Court decision, a taxpayer forfeited his charitable contribution for several reasons but one of the reasons was due to an insufficient charitable contribution receipt. The receipt issued to the taxpayer failed to contain the statement that there were no goods or services provided to the donor in exchange for the contribution.
Background
In 1995 Congress enacted IRC Section 170(f)(8)requiring a donor to obtain a qualifying charitable contribution receipt to claim a deduction for a contribution of $250 or more. A qualifying receipt must meet the following criteria:
1. The receipt must contain the amount of cash or a description of the property contributed.
2. The receipt must state whether or not the donee organization provided any goods or services in consideration, in whole or in part, for the contribution.
3. The receipt must contain a description and a good faith estimate of the value of any goods or services referred to in (2) or, if such goods or services consist solely of intangible religious benefits, a statement to that effect.
4. The receipt must be addressed to the donor and obtained by the donor by the earlier of the date the donor files his tax return or the due date of the return (including extensions).
Additionally, legislation in 2006 added to the above requirements the need for the receipt to reflect the dates of the donations as well as the individual amounts of the donations.
Implementation
Despite the fact that these changes in the law originated in 1995, an amazing number of charitable organizations still do not issue receipts with the wording required to make the receipt a qualifying receipt. Granted the law is not on the organization, but rather it is on the donor to have a qualifying receipt in order to claim a donation. However, donors believe that the receipts received from charitable and religious organizations will be qualifying receipts. Many discover in the course of an IRS exam that the receipt received from an organization is not qualifying and lose the corresponding deduction. There is nothing at this point that can be done for a donor. The donation is lost and the receipt cannot be corrected. At this point, an organization may lose a valuable relationship.
Despite being the law for 15 years, many organizations, including many religious organizations, are issuing receipts to their donors that are insufficient to claim a donation. Each year as my firm prepares tax returns for individuals, we see receipts that are insufficient to claim a donation and must be reissued prior to the completion of the return. Additionally, I have received calls from distraught church finance and business administrators wanting to know how to provide assistance to the member who has lost the deduction due to an insufficient receipt.
In order to make sure that an organization is not the one in the hot seat dealing with a distraught and angry donor, it should review all the contribution receipts for your organization and make sure the following wording appears on the receipt.
There were no goods or services given in exchange for the above contributions other than intangible religious benefits.
In the event the receipt does include the fair market value of the goods or services received, the the organization may include this statement:
There were no goods or services given in exchange for the above contributions other than intangible religious benefits and those goods or services so indicated on this receipt.
26 Eylül 2012 Çarşamba
Update of the Driscolls' Two Houses
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On February 8th, the 11th Circuit Court of Appeals slammed the door on the ability to use housing allowances for multiple homes. In a short but definitive ruling, the court states, in essence, that "a" means "one" and that it should not be construed to be able to mean "more than one". The court relies on the consistent use of the term "home" as holding a singular connotation within the statute. Therefore, if a minister was planning on utilizing his or her housing allowance for more than one "home", it is time to make the appropriate adjustments to the 2012 tax estimates.
Blog 2 Print
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Blogger is advertising a service called, Blog 2 Print, with which you can turn your blog into an actual, bound book. Out of curiosity, I decided to give it a try.
You can choose which posts from your blog you'd like, or just choose all of them, including pictures, and then the program does the page layout and creates a numbered table of contents. I decided to publish the first year of my blog, which turned out to be about 30 pages in the book, for a cost of around $20.00. I designed the cover, then decided on the paperback version, rather than hardbound, to save money. I wanted to see the quality of their cheapest option.
Overall, I'm pleased with the results. The finished book looks like an 8" by 11" chapbook and the paper quality is great. The images are true and crisp. It's nice having a bound version of my blog to read and see the progression over time of my posts and events, much easier than clicking on "older posts." I think this could be a really nice option for people who have a blog for their poetry or artwork (there's a book option for blogs that are primarily images) and want to create a chapbook to show to possible editors. This isn't a cost effective option if you want to make a lot of books, though. $20.00 per book is a lot of money for a chapbook to sell to readers, but for gifts or to show off your blog at conferences, it's a great option.
There may be other options out there for a better price per unit, so I'll do some research. Do any of you know of other Blog 2 Book type services?
You can choose which posts from your blog you'd like, or just choose all of them, including pictures, and then the program does the page layout and creates a numbered table of contents. I decided to publish the first year of my blog, which turned out to be about 30 pages in the book, for a cost of around $20.00. I designed the cover, then decided on the paperback version, rather than hardbound, to save money. I wanted to see the quality of their cheapest option.
Overall, I'm pleased with the results. The finished book looks like an 8" by 11" chapbook and the paper quality is great. The images are true and crisp. It's nice having a bound version of my blog to read and see the progression over time of my posts and events, much easier than clicking on "older posts." I think this could be a really nice option for people who have a blog for their poetry or artwork (there's a book option for blogs that are primarily images) and want to create a chapbook to show to possible editors. This isn't a cost effective option if you want to make a lot of books, though. $20.00 per book is a lot of money for a chapbook to sell to readers, but for gifts or to show off your blog at conferences, it's a great option.
There may be other options out there for a better price per unit, so I'll do some research. Do any of you know of other Blog 2 Book type services?
Introducing the newest Medusa's Muse author
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Right now I am preparing to edit a brand new manuscript from a brand new Medusa's Muse author. This is why I created a book publishing company: discovering new authors and fresh voices with a passionate story to tell. I've got my reading glasses on, my lap-top battery fully charged, a fresh cup of coffee, the manuscript opened in Word and "track changes" turned to "on." My muse is eagerly peering over my shoulder watching as I type notes inside the pages on my screen. Eventually she'll get a little bored; she finds editing tedious. But for now, she's just as fixated on this brand new Medusa's Muse book as I am.
The writer is Shannon Drury, author of The Radical Housewife. Click the link to explore her blog and get a taste of her writing. She's fabulous. A feminist housewife and mother living in Minnesota, and president of the Minnesota chapter of the National Organization for Women (NOW). Her story is exactly the type I look for. It's honest, funny, passionate, and the author doesn't quiet fit within any category. If she's a housewife, how can she call herself a feminist? She gets criticism from both conservatives and liberals, which means she's perfect for my Muse.
Of course, I'll get a lot more editing done if my daughter would leave me alone for more than 10 minutes at a time.
The writer is Shannon Drury, author of The Radical Housewife. Click the link to explore her blog and get a taste of her writing. She's fabulous. A feminist housewife and mother living in Minnesota, and president of the Minnesota chapter of the National Organization for Women (NOW). Her story is exactly the type I look for. It's honest, funny, passionate, and the author doesn't quiet fit within any category. If she's a housewife, how can she call herself a feminist? She gets criticism from both conservatives and liberals, which means she's perfect for my Muse.
Of course, I'll get a lot more editing done if my daughter would leave me alone for more than 10 minutes at a time.
It's Tax Time. Do you know where your receipts are?
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The H and R Block office has reopened and there are signs all over town announcing deals on tax preparation. That can mean only one thing: it's tax time. The wonderful time of year when we all whimper at the pile of paperwork and forms demanding our immediate attention, realizing we've lost most of our receipts, and we have no idea if we got all of our 1099's and W2's from everyone we worked for.
This is also an excellent time of year to crack open that expensive bottle of scotch Uncle Jo gave us for Christmas.
When I was writing What You Need to Know to Be a Pro, I decided not to include a chapter about taxes because the tax code changes all the time. There is plenty of info throughout the book about keeping track of expenses in preparation of tax season, but I skipped specific info about filing. Instead, I research taxes every year and post my findings on this blog.
First, I found this video on ehow. It's more about keeping track of deductions rather than forms, but she explains receipts very well. The presenter in the video has a whole series about Freelance Writing.
Taxes & Being a Freelance Writer —powered by eHow.com
And here are a few articles I found this morning. Click the links to read the full article.
Writing.org Taxes for Freelancers
Did you earn your first income from freelancing last year? If so, you're in for a new adventure: calculating your income and Social Security taxes as a self-employed person.
The basic principle of paying freelance taxes is simple: You add up your income, deduct your expenses, and transfer the net profit or loss to Line 12, "Business income (or loss)," on Form 1040.
Unfortunately, what's simple in principle can be complicated in practice. Here are a few guidelines to help you get started:
Tax Issues for Freelance Writers
Here are some tips and strategies for thinking about your taxes. There are special circumstances that apply to freelance writers and other independent professionals, so I will highlight what you need to know to prepare your taxes.
Being self-employed is quite possibly one of the best tax strategies available today. Unlike being an employee, freelancers are in full control of their financial and tax situation. But independence also comes at a cost. Independent contractors face higher taxes and more record keeping duties than employees.
I really like this next article, written by a freelance writer and business expert.
Blue Inkwell Taxes for the Freelance Writer
Setting up shop as a freelance is easy enough. Unfortunately, most novices don’t think about the tax implications of what they’re doing until their first tax season rolls around. Then the questions pour out.
What do I have to claim?How do I deal with 1099s?What classifies as a deduction?Am I supposed to pay quarterly taxes?
I'll keep researching the tax code for 2011 and post what I find here. If you have any helpful articles, post the link in comments.
And good luck with the receipt hunt. Check your car. I found lots of Medusa receipts in mine.
This is also an excellent time of year to crack open that expensive bottle of scotch Uncle Jo gave us for Christmas.
When I was writing What You Need to Know to Be a Pro, I decided not to include a chapter about taxes because the tax code changes all the time. There is plenty of info throughout the book about keeping track of expenses in preparation of tax season, but I skipped specific info about filing. Instead, I research taxes every year and post my findings on this blog.
First, I found this video on ehow. It's more about keeping track of deductions rather than forms, but she explains receipts very well. The presenter in the video has a whole series about Freelance Writing.
Taxes & Being a Freelance Writer —powered by eHow.com
And here are a few articles I found this morning. Click the links to read the full article.
Writing.org Taxes for Freelancers
Did you earn your first income from freelancing last year? If so, you're in for a new adventure: calculating your income and Social Security taxes as a self-employed person.
The basic principle of paying freelance taxes is simple: You add up your income, deduct your expenses, and transfer the net profit or loss to Line 12, "Business income (or loss)," on Form 1040.
Unfortunately, what's simple in principle can be complicated in practice. Here are a few guidelines to help you get started:
Tax Issues for Freelance Writers
Here are some tips and strategies for thinking about your taxes. There are special circumstances that apply to freelance writers and other independent professionals, so I will highlight what you need to know to prepare your taxes.
Being self-employed is quite possibly one of the best tax strategies available today. Unlike being an employee, freelancers are in full control of their financial and tax situation. But independence also comes at a cost. Independent contractors face higher taxes and more record keeping duties than employees.
I really like this next article, written by a freelance writer and business expert.
Blue Inkwell Taxes for the Freelance Writer
Setting up shop as a freelance is easy enough. Unfortunately, most novices don’t think about the tax implications of what they’re doing until their first tax season rolls around. Then the questions pour out.
What do I have to claim?How do I deal with 1099s?What classifies as a deduction?Am I supposed to pay quarterly taxes?
I'll keep researching the tax code for 2011 and post what I find here. If you have any helpful articles, post the link in comments.
And good luck with the receipt hunt. Check your car. I found lots of Medusa receipts in mine.
25 Eylül 2012 Salı
Church as Facilitator to Pastor Contributions to a Traditional IRA Account
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Question:
Is there any reason a church could not make deposits to anIRA account for its pastor? It is understood that any deposits would have to bereported as income on Form W-2, but other than that, is there any problem?Also, how much of a monthly contribution would be necessary for a 403(b) to beworth the trouble to set up?
Usually it is the responsibility of the minister to makecontributions to his IRA himself and take a deduction when he files hispersonal returns. But there is no restriction to assist in payroll deductionsfor any purpose as long as they are handled correctly on Form W-2 (as issuggested in the Question). Many ministers do not use traditional IRA planssince Internal Revenue Code section 403(b) and Roth IRA plans are available.Self-employment tax is not assessed on contributions to Church Plans (IRS Revenue Rulings 68-395 and 78-6) which it isbelieved to include 403(b) plans.
The members of my Federal Taxation I class at MaranathaBaptist Bible College in Watertown, Wisconsin have taken on the challenge ofstudy and research to answer posted questions. Leslie Harrison of Michigan gets creditfor this one.
Is there any reason a church could not make deposits to anIRA account for its pastor? It is understood that any deposits would have to bereported as income on Form W-2, but other than that, is there any problem?Also, how much of a monthly contribution would be necessary for a 403(b) to beworth the trouble to set up?
Usually it is the responsibility of the minister to makecontributions to his IRA himself and take a deduction when he files hispersonal returns. But there is no restriction to assist in payroll deductionsfor any purpose as long as they are handled correctly on Form W-2 (as issuggested in the Question). Many ministers do not use traditional IRA planssince Internal Revenue Code section 403(b) and Roth IRA plans are available.Self-employment tax is not assessed on contributions to Church Plans (IRS Revenue Rulings 68-395 and 78-6) which it isbelieved to include 403(b) plans.
The members of my Federal Taxation I class at MaranathaBaptist Bible College in Watertown, Wisconsin have taken on the challenge ofstudy and research to answer posted questions. Leslie Harrison of Michigan gets creditfor this one.
Housing Allowance Designation of IRC 403(b) Distributions
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Question:
Are Internal Revenue Code 403(b) distributions (to aminister over the age of 59 ½) that are designated as housing allowance inexcess of housings costs subject to self-employment tax, or are they onlysubject to income tax as regular income?
Answer:
If a minister owns a home, the amount excluded from theminister’s gross income as a housing allowance is limited to the least of thefollowing: (a) the amount actually used to provide a home, (b) the amountofficially designated as a housing allowance, or c) the fair rental value ofthe home.
As with virtually all retirement plan distributions, noself-employment tax is due on 403(b) distributions.
The members of my Federal Taxation I class at MaranathaBaptist Bible College in Watertown, Wisconsin have taken on the challenge ofstudy and research to answer posted questions. Mariya Bondarenko of Minnesota getscredit for this one.
Are Internal Revenue Code 403(b) distributions (to aminister over the age of 59 ½) that are designated as housing allowance inexcess of housings costs subject to self-employment tax, or are they onlysubject to income tax as regular income?
Answer:
If a minister owns a home, the amount excluded from theminister’s gross income as a housing allowance is limited to the least of thefollowing: (a) the amount actually used to provide a home, (b) the amountofficially designated as a housing allowance, or c) the fair rental value ofthe home.
As with virtually all retirement plan distributions, noself-employment tax is due on 403(b) distributions.
The members of my Federal Taxation I class at MaranathaBaptist Bible College in Watertown, Wisconsin have taken on the challenge ofstudy and research to answer posted questions. Mariya Bondarenko of Minnesota getscredit for this one.
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