New option for charitable giving

If you are age 70 1/2 or older, there is another option for you to consider when making charitable contributions. Beginning after December 31, 2005, you may be allowed to make a charitable contribution of up to $100,000 of distributions from your IRA. Although there is no charitable contribution deduction allowed,

you are not required to include the distribution in your income for the year the donation is made. This option is limited and may not be the best option for some taxpayers. First, the charitable contribution distribution is allowed from 2006 through 2013, with the maximum contribution limited at $100,000. The taxpayer must be over the age of 701/2 and currently taking his or her required minimum distributions. Only the distributions that are otherwise required to be included in income are eligible for the charitable contribution distribution. The distribution must be made to the charity by a trustee directly to the charity. This means that a distribution that is made to the IRA owner and then turned over to the charity, does not qualify.

Using this option to reduce the balance in your IRA can be a valuable estate planning tool. The value of your IRA is required to be included in your estate at death. Currently estates with a value in excess of $5 million are subject to estate tax. Contributing some of your IRA to a charity while you are still living is an effective way to reduce your taxable estate.

Tax Tips Small Business

  • Starting Your Own Business?

    Here are a few quick tips to help you reduce taxes

    Open a separate business checking account. Many small business owners don't realize the complications that can arise from using their personal checking account to pay for business expenses. If business expenses are mixed in with personal expenses, the IRS may disallow them.

    Read more ...

Small Business Quick Tip

  • Business Mileage Rate

    Instead of deducting the actual expenses for the business use of your vehicle, opt for the standard mileage rate. In 2016, you can deduct 54 cents for each business mile you drive.
Tuesday, 16th October 2018
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Tax Tips Personal

  • Take Advantage of Tax Savings in a Down Market

    Know when you have a deductible loss

    Just because the stock market lost money, doesn't mean you have a deductible loss. As long as you hold on to an investment, you only have a loss on paper. It's only when you actually sell the investment that you have a transaction to report on your tax return.

    Fortunately, the tax law allows you to offset your capital gains by your capital losses. You can avoid or minimize taxable gain by selling two investments, one at a gain and the other at a loss.

    Read more ...

Personal Quick Tip

  • Mileage Rates

     

    Beginning January 1, 2017, the standard mileage rates for the use of a car (including vans, pickups, or panel trucks) are:
    • 53.5 cents per mile for business miles driven;
    • 17 cents per mile for all miles driven for medical or moving purposes; and
    • 14 cents per mile for all miles drive for charitable purposes.