Gifts to Charity: Six Facts About Written Acknowledgements

 

Throughout the year, many taxpayers contribute money or gifts to qualified organizations eligible to receive tax-deductible charitable contributions. Taxpayers who plan to claim a charitable deduction on their tax return must do two things:

• Have a bank record or written communication from a charity for any monetary contributions.

• Get a written acknowledgment from the charity for any single donation of $250 or more.

Here are six things for taxpayers to remember about these donations and written acknowledgements:

• Taxpayers who make single donations of $250 or more to a charity must have one of the following:A separate acknowledgment from the organization for each donation of $250 or more.One acknowledgment from the organization listing the amount and date of each contribution of $250 or more.
• The $250 threshold doesn’t mean a taxpayer adds up separate contributions of less than $250 throughout the year.
• For example, if someone gave a $25 offering to their church each week, they don’t need an acknowledgement from the church, even though their contributions for the year are more than $250.
• Contributions made by payroll deduction are treated as separate contributions for each pay period.
• If a taxpayer makes a payment that is partly for goods and services, their deductible contribution is the amount of the payment that is more than the value of those goods and services.
• A taxpayer must get the acknowledgement on or before the earlier of these two dates:
• The date they file their return for the year in which they make the contribution.
• The due date, including extensions, for filing the return.
• If the acknowledgment doesn't show the date of the contribution, the taxpayers must also have a bank record or receipt that does show the date.

Source:Internal Revenue Service

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Phasing out the myRA program

What’s happening?

The U.S. Department of the Treasury has decided to phase out the myRA® retirement savings program, and the program is no longer accepting new enrollments. Existing accounts can remain open until further notice.

 

 

 

What is happening to my account?

Your account remains open and you can continue to manage your account until further notice. The funds in your account remain in an investment issued by the U.S. Department of the Treasury. We’ll be in touch over the coming weeks with next steps and relevant deadlines regarding the transfer or closure of your account. In the meantime, we want you to know any myRA with a zero ($0) balance as of September 15, 2017 or later, will be subject to possible automatic closure beginning on September 18, 2017.

Is my money safe?

Yes. The funds in your account are safe and remain in an investment issued by the U.S. Department of the Treasury.

What do I need to do?

We will be reaching out to all of our account holders with more information regarding the transfer or closure of your account. We will provide account holders with additional information in the coming weeks that outlines when we’ll stop accepting and processing deposits. We recommend you log in to your account to make sure your contact information is complete and up to date. You can also update your information by contacting customer service.

How do I transfer my myRA account to another Roth IRA provider where I can save and invest?

You can initiate a direct transfer of your full account balance to another Roth IRA at any time. To do so, you will first want to identify or open an account at the new Roth IRA provider where you will continue to save and invest. Then, by working with a new Roth IRA provider you select, you can transfer your myRA balance to your new Roth IRA. By opening another Roth IRA and working with the new Roth IRA provider to initiate a transfer of the funds in your myRA to your new Roth IRA, you avoid withholding and potential tax liabilities (including potential tax penalties) that may apply to earnings if funds are paid directly to you.

How can I learn more about rules related to transfers and 60-day rollovers to another Roth IRA?

You can learn more at myRA.gov or at irs.gov/rollovers.

How can I close my account?

To request closure of your account, call myRA customer support at 855-406-6972 or TTY/TDD 855-408-6972 or International 414-365-9616. Please remember that a myRA follows Roth IRA rules. To avoid tax liabilities that may apply to earnings if funds are paid directly to you, you will need to deposit the amount of your distribution (including any tax withholding) into a private-sector Roth IRA within 60 days of the distribution. For more information about Roth IRA distributions, visit myRA.gov/roth-ira.

Why did I receive an additional payment from myRA after I withdrew all the funds from my account?

You may have received an additional payment due to a timing difference between when interest earned was reflected in your account balance, and when you requested a withdrawal (or distribution). When necessary, these additional interest payments are made to ensure

account owners receive their full account balances.

Who can I contact for more information?

You may contact our Call Center Monday through Friday from 8 a.m. to 8 p.m., E.T. at 855-406-6972.

Source: usa.gov

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Extension Filers: Deadline is Monday, Oct. 16

Extension Filers: Deadline is Monday, Oct. 16; Prior-Year Adjusted Gross Income Amount May Be Needed to File Electronically

WASHINGTON – The Internal Revenue Service has an important reminder for taxpayers who filed for an extension and face an Oct. 16 filing deadline: The adjusted gross income (AGI) amount from their 2015 return may be needed to electronically file their 2016 tax return.

For those taxpayers who have a valid extension and are in or affected by a federally declared disaster area may be allowed more time to file. Currently, taxpayers impacted by Hurricanes Harvey, Irma and Maria as well as people in parts of Michigan and West Virginia qualify for this relief.

Taxpayers who prepare their own electronic tax returns are required to electronically sign and validate their return. Using an electronic filing PIN is no longer an option. To authenticate their identities, taxpayers will also need to enter either of two items: their prior-year AGI or their prior-year self-select PIN and their date of birth. If married filing jointly, both taxpayers must authenticate their identities with this information.

Generally, tax-preparation software automatically generates the prior-year AGI and/or self-select PIN for returning customers. However, taxpayers who are new to a software product must enter the prior-year AGI or prior-year self-select PIN themselves.

Source: Internal Revenue Service

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(858)247-1680

  

Special Relief to Encourage Leave-Based Donation Programs for Victims of Hurricane and Tropical Storm Irma

IRS Provides Special Relief to Encourage Leave-Based Donation Programs for Victims of Hurricane and Tropical Storm Irma

WASHINGTON – The Internal Revenue Service announced special relief designed to support leave-based donation programs to aid victims of Hurricane and Tropical Storm Irma. This parallels relief granted to Hurricane and Tropical Storm Harvey victims.

Under these programs, employees may forgo their vacation, sick or personal leave in exchange for cash payments the employer makes, before Jan. 1, 2019, to charitable organizations providing relief for the victims of this disaster.

Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the cash payments as business expenses.

Source: Internal Revenue Service

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(858)247-1680

 

Know Your Taxpayer Bill of Rights

Every taxpayer has a set of fundamental rights and the IRS has an obligation to protect them. The “Taxpayer Bill of Rights” groups the taxpayer rights found in the tax code into 10 categories. Know these rights when interacting with the IRS.

Below are the descriptions of each right:

1. The Right to Be Informed. Taxpayers have the right to know what to do in order to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures on all tax forms, instructions, publications, notices and correspondence. They have the right to know about IRS decisions affecting their accounts and receive clear explanations of the outcomes.
2. The Right to Quality Service. Taxpayers have the right to receive prompt, courteous and professional assistance in their interactions with the IRS. They also have the right to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.
3. The Right to Pay No More Than the Correct Amount of Tax. Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties and to have the IRS apply all tax payments properly.
4. The Right to Challenge the IRS’s Position and Be Heard. Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions. They also have the right to expect the IRS to consider their timely objections promptly and fairly and to receive a response if the IRS does not agree with their position.
5. The Right to Appeal an IRS Decision in an Independent Forum. Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties and have the right to receive a written response regarding the Office of Appeals’ a decision. Taxpayers generally have the right to take their cases to court.
6. The Right to Finality. Taxpayers have the right to know the maximum amount of time they have to challenge an IRS position as well as the amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.
7. The Right to Privacy. Taxpayers have the right to expect that any IRS inquiry, audit or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.
8. The Right to Confidentiality. Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer return information.
9. The Right to Retain Representation. Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.
10. The Right to a Fair and Just Tax System. Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.

Source: Internal Revenue Service

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Job Search Expenses Can be Tax Deductible

Taxpayers who are looking for a new job that is in the same line of work may be able to deduct some job-hunting expenses on their federal income tax return, even if they don’t get a new job.
Here are some important facts to know about deducting costs related to job searches:

1. Same Occupation. Expenses are tax deductible when the job search is in a taxpayer’s current line of work. 
2. Résumé Costs. Costs associated in preparing and mailing a résumé are tax deductible.
3. Travel Expenses. Travel costs to look for a new job are deductible. Expenses including transportation, meals and lodging are deductible if the trip is mainly to look for a new job. Some costs are still deductible even if looking for a job is not the main purpose of the trip.
4. Placement Agency. Job placement or employment agency fees are deductible.
5. Reimbursed Costs. If an employer or other party reimburses search related expenses, like agency fees, they are not deductible.
6. Schedule A. Report job search expenses on Schedule A of a 1040 tax return and claim them as miscellaneous deductions. The total miscellaneous deductions cannot be more than two percent of adjusted gross income.

Taxpayers can’t deduct these expenses if they:

• Are looking for a job in a new occupation,
• Had a substantial break between the ending of their last job and looking for a new one, or
• Are looking for a job for the first time

Source: Internal Revenue Service

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(858)247-1680

 

Who Should Renew an ITIN?

Taxpayers with ITINs set to expire and who need to file a tax return in 2018 must submit a renewal application. Others do not need to take any action.

• ITINs with middle digits 70, 71, 72, or 80 (For example: 9NN-70-NNNN) need to be renewed if the taxpayer will have a filing requirement in 2018.
• Taxpayers whose ITINs expired due to lack of use should only renew their ITIN if they will have a filing requirement in 2018.
• Taxpayers who are eligible for, or who have, an SSN should not renew their ITIN, but should notify IRS both of their SSN and previous ITIN, so that their accounts can be merged.
• Taxpayers whose ITINs have middle digits 78 or 79 that have expired should renew their ITIN if they will have a filing requirement in 2018.

 
Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680