How to resolve AdBlock issue? 
Business News
- Details
- Written by: Internal Revenue Service
WASHINGTON, DC – Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years.
Some of these changes include the following.
Special charitable contributions for certain IRA owners
This provision, currently scheduled to expire at the end of 2009, offers older owners of individual retirement accounts (IRAs) a different way to give to charity.
An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, created in 2006, is available for distributions from IRAs, regardless of whether the owners itemize their deductions.
Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.
To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Amounts so transferred are not taxable and no deduction is available for the transfer.
Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.
Amounts transferred to a charity from an IRA are counted in determining whether the owner has met the IRA's required minimum distribution. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats transferred amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions.
See Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions.
Rules for clothing and household items
To be deductible, clothing and household items donated to charity generally must be in good used condition or better.
A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return.
Household items include furniture, furnishings, electronics, appliances and linens.
Guidelines for monetary donations
To deduct any charitable donation of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.
Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.
Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction.
For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.
These requirements for the deduction of monetary donations do not change the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet both requirements.
Reminders
To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following additional reminders:
Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2009 count for 2009. This is true even if the credit card bill isn't paid until 2010. Also, checks count for 2009 as long as they are mailed in 2009 and clear, shortly thereafter.
Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions. The searchable online version can be found at IRS.gov under Search for Charities. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even if they are not listed in Publication 78.
For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceed the standard deduction. Use the 2009 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.
For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity's unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value. Additional rules apply for a contribution of $250 or more.
The deduction for a motor vehicle, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C, or a similar statement, must be provided to the donor by the organization and attached to the donor's tax return.
If the amount of a taxpayer's deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.
- Details
- Written by: California Board of Equalization
These online products are a cost effective, convenient way for taxpayers to learn about the BOE tax programs and how to comply with California tax laws.
The virtual seminars are designed specifically to enhance the in-person attention taxpayers can get through sales and use tax classes offered in BOE offices, and seminars offered throughout the state.
The BOE will soon offer a total virtual one-stop-shop option for small business fairs and nonprofit seminars. The site will include links to the agency's seminar partners: Franchise Tax Board, Internal Revenue Service, Employment Development Department, U.S. Small Business Administration, and other local, state and federal agencies.
The site will offer contact information, presentations, videos, audio recordings and more.
The BOE will provide to its community partners, online educational and learning product training and facilitation guides on how to use the products as a convenient resource.
In turn, the community partners will be capable of assisting their clients in using the BOE online products.
Virtual seminars are currently available for the following five programs: basic sales and use tax; nonprofit organizations; small business fairs; eFile; and retail sales of cigarettes and tobacco products.
For more information on the BOE online tutorials, visit www.boe.ca.gov/sutax/tpsched.htm .
Chairwoman Betty T. Yee was elected to her post in November 2006. Her district includes many of California’s coastal counties, from Del Norte to Santa Barbara, and includes the entire San Francisco Bay Area.
The five-member California State Board of Equalization is a publicly elected tax board.
The BOE collects more than $53 billion annually in taxes and fees supporting state and local government services.
It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes.
For more information on other taxes and fees in California, visit www.taxes.ca.gov .
- Details
- Written by: Editor
The meeting will begin at 6:30 p.m. at Howard's Grotto in Clearlake.
The menu will include chicken picatta, prime rib and the shrimp linguini for dinner choices.
The cost is $20 per person.
Come and meet the chamber's new board members.
The maximum number at the dinner will be 30 people; please RSVP by calling the Clear Lake Chamber of Commerce at 707-994-3600.
- Details
- Written by: Editor
SACRAMENTO – With the holiday season here, the Board of Equalization (BOE) reminds Californians of their seasonal tax obligations.
Sales of many seasonal items, such as Christmas trees and firewood, are taxable.
In addition, purchases of many holiday items, such as holiday cards and books, are taxable even when purchased from an out-of-state seller.
Consumers are reminded that use tax is due on purchases they make from out-of-state retailers online – even if the retailer does not charge California tax.
Firewood sales, as well as labor or service charges related to firewood sales (cutting, splitting, delivery, etc.) are taxable. Christmas trees, wreaths, ornaments, and other similar holiday items are also subject to sales tax.
If you plan to sell any of these items this holiday season, you should register with the BOE and obtain a seller’s permit.
Generally, there is no sales tax exemption for charities, nonprofits, and civic organizations.
Individuals or organizations that make three or more sales in any 12-month period should contact the BOE to apply for a seller’s permit. Those planning to sell only during the holiday season should apply for a temporary seller’s permit.
BOE representatives perform inspections statewide at flea-markets, Christmas tree lots, and street-vending locations to ensure that businesses are properly registered.
For more information about obtaining a California seller’s permit, see publication 73, Your California Seller’s Permit. For more information about nonprofit organizations, see publication 18, Nonprofit Organizations, available online at www.boe.ca.gov , or contact the BOE’s call center at 800-400-7115.
The BOE advises that consumers keep receipts from online purchases. Most consumers are familiar with sales tax that is applied when a purchase is made from a California retailer.
When a purchase is made from an out-of-state retailer, however, if the retailer does not collect California tax, as is the case with many out-of-state retailers, the consumer is required to self-report and pay use tax on the purchase.
Consumers should keep receipts from online and catalog purchases from out-of-state retailers to make sure that California tax was collected. The rate of use tax owed is equivalent to the sales tax rate where the items will be used, which usually means where the purchaser lives.
Use tax can be reported by individual and business taxpayers who are not required to hold a seller’s permit through a separate line on their California income tax return. A BOE consumer use tax return can also be filed directly to BOE.
The consumer use tax return, along with an information booklet, California Use Tax for Purchases Made from Out-of-State Businesses, is available for download at http://www.boe.ca.gov/pdf/pub79b.pdf . If the purchaser has a seller’s permit, the use tax should be reported on their regular return.
For more information, see the links below or contact the BOE’s call center at 800-400-7115.
The California State Board of Equalization is a publicly elected tax board. The BOE collects more than $53 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit www.taxes.ca.gov .