Tip for December, 2017
Some taxpayers who don't itemize deductions may be overpaying their income taxes. Now is the time to review your situation to determine if you should itemize your deductions. You still have time to make last-minute changes to your deductions.
Common itemized deductions include charitable contributions, mortgage interest, state and local taxes; or medical and dental expenses. Certain miscellaneous items such as some job-related expenses, casualty or theft losses, union dues or tax preparation fees may be deductible. Even gambling losses may be deductible up to the amount of gambling income.
If you are close to or exceed your standard deduction threshold there are things you can do to increase your itemized deductions.
*You can donate appreciated stock directly to a qualified charity. This may be a double tax benefit if there is long-term gain which would have been taxable if you sold the stock.
*Charitable donations are deductible when paid. If you already planned to make a donation next year you can make the donations before the end of this year to increase your itemized deductions this year.
*Pay your taxes this year including property taxes and other tax payments which may be payable next year.
Note that for some taxpayers moving deductions between tax years may result in itemized deductions in one year and using the standard deduction in another. Done properly this can produce a lower tax burden over the two years. If you already itemize deductions, moving deductions into this year may speed up your tax benefit and avoid the uncertainty of future changes in the tax law. Remember that for most itemized deductions you must use the deduction in the year paid.
You should review your tax situation and may any necessary changes before year's end while there is still time.
Tip for November, 2017
In recent years the Tuesday following Thanksgiving has unofficially become "Giving Tuesday".
After the more commercial shopping events such as "Black Friday" and "Cyber Monday" it helps focus attention on charitable giving during the holiday season.
This year Giving Tuesday will be on November 28, 2017.
If your holiday season includes charitable giving, please consider the Winn Feline Foundation. Winn has funded over $6 million in health research for cats at more than 30 partner institutions worldwide.
As a 501(c)(3) organization, donations to Winn are fully tax deductible.
Tip for October, 2017
Tax reform is a top legislative topic currently under discussion in Congress.
There are several changes being proposed under which your charitable donation today may produce a greater tax benefit than waiting to donate in future tax years.
(1) Itemized deductions may be capped in the future. Since charitable contributions are included in your itemized deductions, your tax benefit may decrease.
(2) If income tax rates are lowered in future years the amount of your net tax benefit from a charitable donation may decrease.
(3) If the standard deduction is increased, some taxpayers may no longer itemize their deductions. Those taxpayers may lose their charitable deduction completely.
A charitable donation today benefits the charity now and may give you a tax deduction this tax year. The same tax benefits may not be as available to you in future years.
Tip for September, 2017
The Internal Revenue Service is warning taxpayers about fake charities soliciting contributions for hurricane relief.
The IRS suggests ways to avoid scam artists posing as charitable organizations by following these tips (edited for brevity): "Be sure to donate to recognized charities. Be wary of charities with names that are similar to familiar or nationally known organizations. ... Don't give out personal financial information - such as Social Security numbers or credit card and bank account numbers and passwords - to anyone who solicits a contribution. ... Never give or send cash... contribute by check or credit card or another way that provides documentation of the donation."
Tip for August, 2017
Did you know you can make a charitable donation with a P.O.D. account?
P.O.D. stands for "Pay on Death". You can name a charity on your savings, checking, CD, or other bank account(s) as your beneficiary when you die. If it is a joint account, such as you and your spouse, the P.O.D. provision will take effect only after the death of the survivor.
During your lifetimes the money is fully under your control. You can add money, take money out, transfer funds, change or close the account at any time. You have full independence and control of these assets during your lifetime(s) and can change arrangements at any time. On the death of the last of the named owners any funds remaining in the account(s) will go to the charity you designated.
Tip for July, 2017
Many Americans take the standard deduction while others itemize their deductions. If you aren't sure which is better for you don't wait until after the end of your tax year. If it is a close call there are steps you can take now to help push you over the line.
Since you take tax deductions in the year paid, you might want to make your charitable contributions for next year sooner, before this year ends. That would double up your charitable deduction total into one year. If you donate stock which has appreciated over the years you can get a double tax benefit. You can get an itemized deduction based on the current fair market value of the stock while avoiding the capital gains taxes that would have been due on sale.
Certain other deductions can be shifted into this year as well or some income deferred into the next. For some taxpayers it may be advantageous to itemize deductions in one year and take the standard deduction in others. By planning ahead you may have a lower combined tax burden over two years.
Tip for June, 2017
An often overlooked way to make charitable contributions is by using other peoples' money. Socially conscious businesses may donate a portion of their proceeds to charity or by offering matching funds.
For example, the online retailer Amazon has a program called Amazon Smile. By enrolling and using the "Smile" site Amazon will make donations of 0.5% of qualifying purchases. You need to sign up and select the Winn Feline Foundation Inc. Winn also works with the IGive and Giving Assistant programs to receive additional contributions.
Some employers will match employee donations to qualified charities (usually up to a certain amount). If your employer has a matching program but needs additional information to include Winn we can assist them with any paperwork. When you donate, the following email acknowledgment has a method to check if your employer will offer a matching donation or view Winn's matching gift program webpage
Don't forget at tax time that you can only deduct the amount of your charitable contributions, not money given by others.
Tip for May, 2017
Now that tax season is behind us, it's time to review the amount of income taxes withheld from your paycheck.
If you owe too much money when you file your return you may face penalties for underpayment.
However, if you received a large refund you may wish to lower your withholding and have more take-home available now. While some people opt for a bigger refund they are, in essence, making an interest free loan of their money to the government. If you are overpaying and wish to have more money available now complete Form W-4, Employee's Withholding Allowance Certificate, and submit it to your employer.
If you underpaid your income taxes you can submit a new W-4 to increase your withholdings.
Tip for April, 2017
While volunteer services for a charity aren't tax deductible you may be able to deduct expenses. You may deduct your actual costs of using your vehicle for charity or use the standard mileage rate.
For 2017 the standard mileage rate for operating your personal motor vehicle in service of a charity will be 14 cents per mile driven. In addition to either your actual costs or the standard mileage rate, you may also deduct your parking and tolls.
You must keep reliable records and itemize your deductions to claim charitable car expenses.
Tip for March, 2017
You must be able to document any charitable donations you deduct on your tax return. Cash donations should have a bank record such as a canceled check or credit card receipt (with the name of the charity) or a written record from the organization. The writing must include the date, the amount and the organization that received the donation.
For charitable contributions greater than $250 you must have an acknowledgment from the qualified organization. For payroll deductions you can keep a copy of your W-2, pay stub, or other employer furnished document. For federal workers your Combined Federal Campaign pledge card should be retained. Additional rules apply for donations of property. You don't submit these records or receipts with your tax return but they should be available in case of an audit.
Tip for February, 2017
One often overlooked source of charitable deductions is giving through an employer's payroll plan. These plans are easy and convenient, which may also make them easy to forget.
Be sure to include these contributions which may be found on your pay stub, form W-2 or other document furnished by your employer. These need not be sent in with your tax return but should be retained for your records along with the pledge card that shows the name of the charity.
For federal workers you may make donations to the Winn Feline Foundation through the Combined Federal Campaign (#10321).
Tip for January, 2017
When making donations some taxpayers may transfer funds from their IRA to an eligible charitable organization. These transferred amounts are counted in determining whether the donor has met the required minimum distribution from their IRA.
To do so the donor must be 70 ½ years of age or older. Up to $100,000 a year may be transferred tax-free directly to an eligible organization. More information about qualified charitable distributions may be found in Publication 590 B, Distributions from Individual Retirement Arrangements.