- Gifting Consequences to Think About
- Frequently, taxpayers think that gifts of cash, securities, or other assets they give to other individuals are tax-deductible and, in turn, the gift recipient sometimes thinks income tax must be paid on the gift received. Nothing is further from the truth. To fully understand the ramifications of gifting, one needs to realize that gift tax laws are interrelated with estate tax laws.
- Keep Track of Meal & Entertainment Expenses
- When looking for deductions to add to your taxes, don’t overlook your meal and entertainment expenses. These types of expenses must be “ordinary” and “necessary” to your business or trade and must be “directly related to” or “associated with” the active conduct of business.
- Don't Be a Victim!
- As the tax-filing season approaches, the identity thieves are gearing up with tax scams to sucker you into providing them with your identity information, which they can then use to charge against your credit cards, tap your bank account, steal your tax refund, file a fraudulent tax return in your name . . . the list goes on and on.
- The IRS Has Your Numbers!
- Correspondence from the IRS has a tendency to escalate a taxpayer's pulse rate. However, most of the letters received are not of the feared “come on down” type that requests an appearance for a face-to-face audit; they would be more likely to just require a written explanation.
- Is Your Charitable Gift Documentation Adequate?
- The IRS recently denied a taxpayer's substantial charitable contribution to his church because the acknowledgement letter from the church lacked the required no goods or services provided statement. The church supplied the taxpayer (we'll call him Jack) with a replacement acknowledgement letter that included the statement, but the IRS rejected the replacement since it was not received contemporaneously. An obviously upset Jack took the issue to tax court but ended up with the same result - no deduction - because his documentation did not meet the law's requirements.
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