Taking a deduction for donations made to charitable organizations sounds simple enough: make a donation and claim it on your tax return when you itemize your deductions.
Of course, whenever taxes are involved, things are never as simple as they seem. Here are three tips for making your charitable contributions count as a tax deduction.
Do you regularly monitor your company's cash accounts? Being aware of where your cash is going can help prevent theft or improper expenditures, which are among the chief sources of loss for small companies.
What can you do to reduce the risk of losses? The textbook answer is to implement "internal controls." Internal controls are standard procedures for assuring the integrity of your financial processes. For example, segregation of duties, such as having more than one person involved in preparing, signing, and reconciling checks, is an internal control.
Here are suggestions for safeguarding your company's cash:
According to a Federal Reserve Board study, over the course of a year, 43% of mobile phone owners with a bank account used mobile banking. Of smartphone owners, 53% used mobile banking. At the same time, 24% of all mobile phone users believed personal information was "somewhat unsafe" when using mobile banking. If you're one of them, you understand that no system is perfect, and you're wise to be vigilant. How can you protect yourself against mobile banking fraud? Here are tips.
Secure your device. Don't provide an opportunity for thieves. Aside from physical safeguards to keep your phone or tablet safe, use password protection that prevents access to the device itself. Customize your privacy preferences and set your keypad to lock when you're not using your phone. Consider restricting location-tracking apps.
Violent weather can wreak emotional and financial havoc. If your home, vehicle, or other personal property is damaged or destroyed by a sudden, unexpected casualty, an itemized tax deduction may help ease the financial burden.
In most cases, you claim a casualty loss in the taxable year the calamity strikes. However, if you're in a federally declared disaster area, you have the option of amending your prior year return. Either way, to receive the maximum benefit you'll need to calculate the amount of your loss. Here's how.
As the owner of your business, you are the decider of salaries for your staff. That's true for your own salary too. While there is no one-size-fits-all formula for determining how much to pay yourself, here are two factors to consider.
Profitability. Regularly review and update your firm's cash flow projections to determine the salary level you can sustain while keeping the business profitable. Your compensation may be minimal as you start up your business. However, beware of going too long without paying yourself a salary, and be sure to document that you're in business to make a profit. Why? Otherwise the IRS may view your perpetually unprofitable business as a hobby – a sham enterprise aimed at avoiding taxes. That can lead to unfavorable tax consequences.
An August 24, 2016, Accounting Today online post notes that the Internal Revenue Service recently unveiled a new procedure to help people who accidentally miss the 60-day time limit for rolling over their retirement plan distributions into another qualified retirement plan or individual retirement account.
In Revenue Procedure 2016-47, the IRS details how eligible taxpayers can qualify for a waiver of the 60-day time limit and avoid possible taxes and penalties on early distributions, if they meet certain circumstances. The revenue procedure includes a sample self-certification letter that a taxpayer can use to notify an administrator or trustee of the retirement plan or IRA receiving the rollover that the taxpayer qualifies for the waiver.
CPA Compass Blog
The IRS recently released an updated version of Publication 4557, Safeguarding Taxpayer Data. Even if you're not in...
Take a look at this new infographic we created showing the tax environment in Illinois.
After years of work, the IRS has finally issued regulations clarifying for the business community when costs...