Month: November 2024

Common Giving Reminders:
• Donating your services doesn’t create a deduction and doesn’t appear anywhere on the tax return
• Donating your “stuff” (i.e. goodwill donations) allows you a deduction equal to the lesser of the cost of the item or its fair-market value only if you itemize. The maximum amount per group of donated items is $5,000 per year (unless you want to get a formal appraisal of what you donated)
• You generally only get a deduction on your return if you give money or stuff to a church, government entity, or 501c3 organization and only if you itemize
• Donating to a GoFundMe campaign for an individual is never a deduction on your return (it is a gift to a friend) since your friend is not a church, government entity, or 501c3 organization
• If you are taking RMDs from a traditional IRA then it is always more tax-efficient to give money directly from the traditional IRA to the organization (versus giving from your checking or savings account) – this is known as a QCD – Qualified Charitable Distribution
• If you spend money while doing work for an organization, then you can deduct the cost of what you spent if you get a letter from the organization stating that you spent that money on behalf of the organization (if you spend money to go on a mission trip, then document your expenses and then ask the sponsoring-organization for a letter stating that they acknowledge that you spent the money on their behalf)
• Generally, if you want to somehow take credit for a donation on your return (whether a QCD, a goodwill donation, a monetary donation, etc.) then you need a receipt/letter from the organization by the date that you file your return that contains the following information:
o Name of charity
o Date of contribution
o Detailed description of property donated
o Amount of contribution
o A statement regarding whether or not any goods or services were provided in exchange for the contribution

Are you withholding enough tax from your wage at work? The only way to be certain is to send us your year-to-date paystubs so that we can take a look. This service is always free to our clients, so don’t hesitate to reach out.

As of 1/1/2024, a new federal law—The Corporate Transparency Act (CTA)—has taken effect.  The Federal Government currently has no centralized database that contains information on every entity in America – this law forces you to report to the Federal Government information about your entity to aid them in anti-money-laundering efforts.

Entities (LLCs, Incs) that existed before 1/1/2024 (i.e. your entity) have until 1/1/2025 to provide basic information to the Federal Government regarding the entity.  This information is reported on a “Beneficial Ownership Information Report” (BOI).  The information provided is basic:

• Entity name
• Entity Address
• Ownership information:
  • Names
  • Addresses
  • Driver’s license images

If the BOI isn’t filed by the due date: the penalty is $591 per day, up to $10,000.

Another note:

• The law also says that your entity has 30 days to update the BOI filing if it changes any of the following after the initial filing:
  • Entity name
  • Ownership
  • Address
  • Any owner’s address

Ask us if this applies to you and if you need our office to submit the filing on your behalf.

If your ex-spouse gives you funds from their 401K due to a divorce settlement, and need those funds before you reach age 59.5, then you likely can withdraw these funds directly from the ex-spouse’s 401K without having to pay a 10% penalty.  If you roll these funds from the 401K to your Traditional IRA, then any withdrawals from the Traditional IRA will be subject to the 10% tax.  If you think you will need these funds before age 59.5, instead of rolling the funds from the 401K to your Traditional IRA, you should consider leaving the funds in a segregated account with the 401K plan trustee.  Distributions from the segregated 401K account pursuant to the divorce decree “QDRO” are not subject to the 10% tax even if made before age 59.5.