New option for charitable giving
If you are age 70 1/2 or older, there is another option for you to consider when making charitable contributions. Beginning after December 31, 2005, you may be allowed to make a charitable contribution of up to $100,000 for 2006 and again in 2007, of distributions from your IRA. Although there is no charitable contribution deduction allowed,
you are not required to include the distribution in your income for the
year the donation is made. This option is limited and may not be the
best option for some taxpayers. First, the charitable contribution
distribution is only allowed in 2006 and 2007, with the maximum
contribution limited at $100,000. The taxpayer must be over the age of
701/2 and currently taking his or her required minimum distributions.
Only the distributions that are otherwise required to be included in
income are eligible for the charitable contribution distribution. The
distribution must be made to the charity by a trustee directly to the
charity. This means that a distribution that is made to the IRA owner
and then turned over to the charity, does not qualify.
Using this option to reduce the balance in your IRA can be a valuable
estate planning tool. The value of your IRA is required to be included
in your estate at death. Until 2009, estates with a value in excess of
$2 million are subject to estate tax. Contributing some of your IRA to
a charity while you are still living is an effective way to reduce your
taxable estate.
Income Tax Preparation, Accounting and Payroll service by Don Brooks & Associates - Don Brooks Associates, Inc.
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Tax Tips Small Business
Reimbursing Your Employees for Business Expenses
What method should you choose?
Attracting and keeping good employees is a goal in any business. One way to make life easier for your employees is to have an easy to use reimbursement plan. Travel, transportation, moving, and educational expenses are common reimbursable expenses. As the employer, you have the option to set up an accountable or nonaccountable reimbursement plan. Under either plan, you can deduct many of the business expenses paid to or for employees. However, the plan you choose can make a big difference to your employees.
Read more...Small Business Quick Tip
| If you are disposing of property used in your business, you may want to consider a like-kind exchange to defer the taxable gain on the sale. |
Saturday, 19th May 2012
Tax Tips Personal
Interest on Summer Recreation May Be Deductible
Your motor home or boat could yield a deduction
If you own a boat or motor home that is fully equipped with kitchen and sanitary facilities and you use it as a "second" home, the interest you pay on it is probably deductible on your tax return. Although a fishing boat without facilities won't qualify, most motor homes and campers do. If you're looking to buy a boat that doesn't qualify as a second home, you may want to consider paying for it with a home equity loan. That way, the interest is generally deductible. As with most tax rules, there are exceptions and limits so check with a tax expert before you sign on the dotted line.
Personal Quick Tip
| Are you planning on making any substantial gifts? Talk to your tax preparer first. Gifts with values exceeding $13,000 must be reported to the IRS. |