Posts Tagged ‘Accounting’

Charitable contributions may help lower your tax bill

Charitable contributions made to qualified organizations may help lower your tax bill. The IRS put together the following tips to help ensure your contributions pay off on your tax return.

• You must give to a qualified organization to have a legitimate tax deduction. To check if an organization is qualified to receive deductible charitable contributions, visit

• You must file Form 1040, Individual Income Tax Return, and itemize your deductions on Schedule A.

• You can’t take a deduction for contributions made to specific individuals, political organizations or candidates or most foreign organizations.

• If you receive a benefit because of your contribution, such as merchandise, tickets to a ball game, dinner or other goods and services, you can deduct only the amount that exceeds the fair market value of the benefit received.

• Donations of stock or other non-cash property are usually valued at the fair market value of the property. Clothing and household items must generally be in good, used condition or better to be deductible. Special rules apply to vehicle donations.

• Fair market value is generally the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.

• Regardless of the amount, to deduct a contribution of cash, check or other monetary gift, taxpayers must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For text message donations, a telephone bill will meet the recordkeeping requirement if it shows the name of the receiving organization, the date of the contribution and the amount given.

• To claim a deduction for contributions of cash or property equaling $250 or more, you must have a written acknowledgment from the qualified organization or certain payroll deduction records. The acknowledgement must be written and include the amount contributed — or a description of the property contributed — and whether the organization provided any goods or services in exchange for the gift. If you received any goods or services, the acknowledgement
must provide a description and good faith estimate of the value. The acknowledgement should state that the only benefit you received was an intangible religious benefit, if that was the case.

• If the total deduction for all noncash contributions for the year is more than $500, taxpayers must complete and attach IRS Form 8283, Noncash Charitable Contributions, to their return.

• Taxpayers, donating an item or a group of similar items valued at more than $5,000, must also complete Section B of Form 8283, which generally requires an appraisal by a qualified appraiser.

• Other records may be required. Consult Publication 526, Charitable Contributions, for details


IRS Simplifies Late S Corp Elections

The Internal Revenue Service has combined parts of several revenue procedures into a new revenue procedure that provides relief to companies that make late elections to become S corporations.

PRF Accounting and Tax Announces NEW website!

Come visit PRF Accounting and Tax completely redesigned website! October 15th is coming quickly, so if you need to get your 2012 taxes filed we can help!! Also we have provided tools to help you get organized to file 2013 Form 1040.