IRAs and Tax-Efficient Charitable Giving: What You Need to Know

IRAs and Tax-Efficient Charitable Giving: What You Need to Know

If you’re someone who enjoys giving to charities, this information could be of use to you. In an article by David Randolph, he offers some helpful tips for charitable IRA owners and how that could benefit them tax-wise. A review of strategies to maximize the tax benefits from charitable giving should be a fundamental part of year-end tax planning for taxpayers and their advisors. For wealthier taxpayers, this might mean complex strategies that work in tandem with estate planning. For others, it might simply mean accelerating deductions to the current year if tax rates are constant or decreasing, but possibly deferring deductions if tax rates are increasing. In either case, there are additional factors for taxpayers who have Individual Retirement Accounts (IRA) to consider now that uncertainty over the use of IRAs for charitable giving has been eliminated following passage of the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). IRA Qualified Charitable Distributions The PATH Act made permanent the provision allowing qualified charitable distributions (QCDs) from IRAs (IRC Section 408(d)(8)). A QCD allows taxpayers who have reached age 70½ to annually exclude from gross income up to $100,000 of distributions made directly from the taxpayer’s IRA to a public operating charity. This provides taxpayers who own IRAs the opportunity to reduce Adjusted Gross Income (AGI), effectively realizing the tax benefit of a charitable contribution deduction without concern over annual AGI limitations. QCDs can also be used to satisfy the required minimum distribution (RMD) rules for the year made and thus might be particularly appealing to taxpayers who do not need the RMD for living expenses. For...
Financial Spring Cleaning: What To Keep & What To Toss After Tax Day (Cont.)

Financial Spring Cleaning: What To Keep & What To Toss After Tax Day (Cont.)

In the last blog, we shared information on the statute of limitations and how long financial documents should be retained. To read this information, see (http://bit.ly/2pBkL6z). Today’s blog shares details on what paperwork may need special attention, and what can safely be destroyed. Occasionally, you’ll have documentation to support transactions that will be reported on future tax returns. Records that may need special attention include: Consider retaining your IRA records – including Roth contributions – until you withdraw all of the money from your account. If you buy capital assets like stocks, bonds, or real estate, you’ll want to keep records which support basis (typically your purchase price plus any adjustments) for as long as you own the property plus three years. If you claim depreciation, amortization, or depletion deductions for certain assets including land or real estate, you’ll want to keep related records for as long as you own the underlying property plus three years. If you claim special tax deductions and tax credits, you may need to keep your records longer than normal (for example, if you file a claim for a loss from worthless securities or bad debt deduction, you should keep those records for seven years). If you claim any other special tax benefits, a good rule of thumb is to keep your records for as long as the tax benefit runs plus three years. To save space (and quite possibly, your sanity), you can scan your records and store them electronically. The IRS has accepted scanned receipts since 1997, a policy that was memorialized by Rev. Proc. 97–22 (downloads as a pdf). Your scanned...
Financial Spring Cleaning: What To Keep & What To Toss After Tax Day

Financial Spring Cleaning: What To Keep & What To Toss After Tax Day

Do you worry about what tax paperwork you should save and which ones are okay to throw away? In an article on Forbes.com, Kelly Phillips writes some very specific and informative tips in order to help out taxpayers like you who question which financial paperwork is most important to keep. When it comes to taxes, many taxpayers are hesitant to throw away even the tiniest scrap of paper. It’s true that the Internal Revenue Service (IRS) wants you to hang onto your important tax records. But that doesn’t mean that you have to keep your tax records forever. The general rule is that you should hold onto your tax returns and supporting documentation until the statute of limitations runs for filing your tax returns or filing for your tax refund. Supporting documentation for your tax returns includes not only your forms W-2 and 1099 but also bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return. When it comes to figuring out the statute of limitations, here’s what you need to know: If you file a correct and timely tax return, the statute of limitations is generally three years after the date of filing or the due date of your tax return, whichever is later (*but see the note below). Remember that you file your tax return after the tax year ends: for example, the statute of limitations for a timely filed 2016 tax return begins to run on April 18, 2017. Keep those records until at least...
With IRS, Ask Forgiveness Not Permission

With IRS, Ask Forgiveness Not Permission

In an article on Forbes.com, Robert W. Wood writes how on the old proverb “it’s better to ask for forgiveness than to ask for permission” can be used when dealing with the IRS. It isn’t a crazy concept. After all, do you want to call the IRS? Doing so is usually an exercise in frustration. In person office visits are likely to be too. Besides, you generally cannot rely on any tax advice IRS employees dish out. That makes the process of soliciting and getting answers to your tax questions, well, questionable. What about more formal inquiries to the IRS, where you can rely on their guidance? That is worth examining, too. Sometimes, asking in advance may not be as sensible as you might think. Consider Yahoo. In 2015, Yahoo CEO Marissa Mayer announced a tax savvy spinoff plan for Yahoo’s remaining 384 million shares in Alibaba. At the time, the shares were worth $23 billion. Yahoo asked the IRS nicely for permission. Eventually, the IRS revealed that it would not issue a private letter ruling, an advance blessing from the IRS. Plainly, the fact that the IRS will not rule did not prove that the deal would be taxable. But if you ask for a ruling you can’t get, the IRS certainly knows about your plans! There is quite a chilling effect if you ask for a ruling and do not get it. If you go ahead with the deal, it could be asking for trouble. In Yahoo’s case, there was talk that maybe it would rely on a tax opinion instead of a private letter ruling. Rulings...
Why Small Businesses Should Always Be One Season Ahead

Why Small Businesses Should Always Be One Season Ahead

Now that the Spring season has started, you should start thinking about how seasonality could affect your business this year. In a recent post by Sage Blog, they offered advice on how you can plan the rest of the 2017 seasonal calendar to help your business. Competition is Fierce As small businesses know, growing your business won’t happen overnight. Corporate giants are using big budgets to target your ideal customers, so you’ll need to take a creative approach to keep pace with industry leaders. From piggybacking on seasonal events with a time-sensitive content calendar to hiring additional staff for busier periods, it pays to be organized when it comes to seasonal marketing. A seasonal event can be a hugely profitable exercise for businesses operating in the retail sector – but if your B2C company falls outside of this niche, there are other ways your business could benefit. Whether you always have your eye on the year ahead or break down your calendar into quarterly plans, it’s crucial to keep one eye on the longer term – while keeping the other fixed on any impending events relevant to your industry. Planning in advance will afford your business the time to consider last year’s holiday trends. If being an authoritative figure in your industry is something you aspire to, staying one step ahead of the seasonal calendar is a great way to comment on recent trends and highlight any predictions for the coming months. From taking social media influences into account to analyzing seasonal consumer behavior, reflecting on trends from the previous 12 months will help to shape your plans for...
IRS Audit Traps & 5 Ways to Steer Clear

IRS Audit Traps & 5 Ways to Steer Clear

No one wants to fight with the IRS especially when it comes to tax audits. You can find out some simple ways to reduce your risk of being audited in this article from Forbes.com. 1. Be Reasonable. Do not be afraid to take deductions and losses to which you are entitled. However, do not take tax positions you are uncomfortable defending. Call it karma. If you generally take reasonable tax positions, you may not need to defend them. You might even take aggressive positions, but it’s best to do it with your documents and authorities lined up. That way, if you do face an audit, it will likely be far easier. Many people speculate that certain items trigger an audit: home office deductions, passive losses, schedule C (sole proprietorship) activities, etc. They can all be problematic, but in the end, you can’t predict the trigger (and you can drive yourself crazy trying). Still, you can be reasonable about every item on your return. If you don’t have a decent claim for a home office, don’t claim it. If your money-losing sole proprietorship is really a fun hobby, treat it that way. 2. Don’t Over-Explain. You’d be surprised how many professionals and amateurs alike try to submit too much information. If your return is complex, you may need to add explanations or disclosures in footnotes. Be concise, truthful and accurate, but don’t provide copies of sales agreements, settlement agreements, bank statements, etc., unless you are later asked to by the IRS. Disclosures can be made on regular paper or special IRS forms. Tax return preparers distinguish “white paper” disclosures from...
South Bay Women’s Conference 2017: Women of Impact and Influence

South Bay Women’s Conference 2017: Women of Impact and Influence

Are you a business woman looking to connect with other like-minded women? Come to the South Bay Women’s Conference! Hosted every year by the South Bay Women’s Association (SBBWA), this year’s theme is Women of Impact and Influence. The SBBWA is a non-profit organization of businesswomen who all put the importance of women’s empowerment through education and a positive environment very highly. They have created a space to motivate, educate, and bring business women together while simultaneously raising money to give scholarships to hardworking women. This year, the conference will be held at the Torrance Marriott on Friday May 5, 2017 from 8:30am -4:00pm. There will be many women from whom to hear motivational speeches and business tips, along with opportunities to shop and network. After a day full of connecting with like-minded professional and influential women, a cocktail party will held. The event will consist of inspirational women like: Keri Murphy: CEO and Founder of Inspired Living, who has over 17 years of entrepreneur experience Karen Logan: Author, CEO of Renaissance Works and internationally recognized expert in business productivity Jen Bricker: an accomplished Aerialist, Author, and Speaker who was born without legs and overcame her hardships Kiersten Quest: Business Expansion Strategist at Max Potentials, whose mission is to help women achieve better financial fulfillment to make more positive changes in the world Tieko Nejon: a former algebra teacher, is now the founder of Tikeo Nejon, a boutique Brand Strategy Firm And many more! Come and listen to these female entrepreneurs speak and see how they can influence your life. Make sure to put this event in your calendar...
6 Characteristics of an Innovative Leader: Part 2

6 Characteristics of an Innovative Leader: Part 2

In the last post, we learned why leadership crises arise and the consequences of them. If you’d like to read the last blog, see (http://bit.ly/2n8dkU1). So, how do we truly break free from these identity crises, re-establish our leadership identities and redefine our corporate cultures for the future? We use the six characteristics of the innovation mentality: See opportunity in everything. Anticipate the unexpected. Unleash your passionate pursuits. Live with an entrepreneurial spirit. Work with a generous purpose. Lead to leave a legacy. Embracing these characteristics enables the new ideas and ideals that leaders haven’t been courageous and vulnerable enough to own. That’s how you’ll see the bigger opportunities, reawaken your entrepreneurial spirit and build a strong business system where collaboration and diversity of thought are embraced as opportunities to build a strong legacy. Simply put, we as leaders must turn the spotlight of accountability on ourselves to strive for excellence — to help guide the evolution of our organizations’ futures and that of our clients and customers. We must be passionate in our pursuits to explore endless possibilities, anticipate the unexpected so change is welcomed, embrace an entrepreneurial spirit to make things better, create stronger alignment and build momentum. What we need is a new mindset, one that takes us from melting pot to mosaic, substitutional to evolutionary thinking, knowledge to wisdom, business to individual and survival to reinvention. Your ability to see, sow, grow and share as a leader using the innovation mentality creates an environment that allows others to see, sow, grow and share, and develop their personal brands and their own leadership identities. This is...
6 Characteristics of an Innovative Leader: Part 1

6 Characteristics of an Innovative Leader: Part 1

Are you going through a leadership identity crisis or wondering how to improve your leadership skills? This excerpt from Glenn Llopis’s book, The Innovation Mentality, shows you 6 characteristics you should have to renew your leadership mentality. At a pitch to the leaders of the merchandising department at a Fortune 500 company, I closed my presentation by asking the leader of the team, “What are you trying to solve for?” She didn’t know how to answer that. Neither did the other leaders on her team, because only those who’ve lived their personal brands openly and genuinely and understand their value propositions have taken the steps to break free from their leadership identity crises. These leadership identity crises are real, severe and have created dysfunction both within the teams those leaders lead and how consumers are identifying with the company and/or its brands and services. They’ve not only minimized trust but also diminished their companies’ performance and influence, reduced productivity and set people back in their careers. These people lost their distinction and their sense of self in the process of having the business define them as individuals. As a result, too many leaders have been acting inauthentically, managing by the templates of old, and cannot evolve to be the leaders their company needs, because those templates stripped them of their identities and left them uncertain about who they are and how to face change. This is how leadership identity crises are born. And when the people at the top of a business have these leadership identity crises, those in the middle on down find it difficult to begin their journey to develop...
Should You Take the IRS-Approved Shortcut for Business Driving?

Should You Take the IRS-Approved Shortcut for Business Driving?

Lots of people are curious about the IRS-Approved shortcut for business driving and if the shortcut should be taken or not. This article from Accountingweb.com could help you decide. The IRS imposes strict record-keeping requirements for taxpayers who use their vehicles for business driving. But at least you can avoid some of the hassle if you use the shortcut approved by the IRS. The question is: Does it make sense to do it on your tax return? Frequently, the answer is “no.” You may find that you’re entitled to a bigger write-off – sometimes, much bigger – if you’ve kept all the records required under the tax law. For starters, if you use your vehicle for business travel, you generally have a tax return choice: deduct actual expenses or use the IRS standard mileage rate. With the actual expense method, you can write off actual expenses attributable to business travel – such as gas, oil, tires, insurance, repairs, licenses, registration fees, etc. – plus a depreciation allowance based on business use. For example, if you use your car 80 percent for business, you can claim a depreciation for 80 percent of the usual depreciation allowance under the IRS table. Plus, you may be entitled to 50 percent “bonus depreciation” for a vehicle placed in service in 2016. Note that annual depreciation deductions are limited by the “luxury car” rules that actually apply at moderate cost levels. The maximum first-year deduction for a passenger car placed in service in 2016, including bonus depreciation, is $11,160 (or $3,160 without bonus depreciation). Therefore, a depreciation deduction based on 80 percent use is...

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