Topics covered included the latest in tax preparation, payroll processing, practice management and accounting solutions.
Ten Tips for Taxpayers Making Charitable Donations
Did you make a donation to a charity this year? If so, you may be able to take a deduction for it on your 2010 tax return.
Here are the top 10 things the IRS wants every taxpayer to know before deducting charitable donations.
Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. You can also check IRS Publication 78, Cumulative List of Organizations, which lists most qualified organizations.
Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.
You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.
If your contribution entitles you to receive merchandise, goods, or services in return such as admission to a charity banquet or sporting event you can deduct only the amount that exceeds the fair market value of the benefit received.
Be sure to keep good records of any contribution you make, regardless of the amount. For any contribution made in cash, you must maintain a record of the contribution such as a bank record including a canceled check or a bank or credit card statement a written record from the charity containing the date and amount of the contribution and the name of the organization, or a payroll deduction record.
Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September but paid the charity only $200 by Dec. 31, your deduction would be $200.
Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.
For any contribution of $250 or more, you must have written acknowledgment from the organization to substantiate your donation. This written proof must include the amount of cash and a description and good faith estimate of value of any property you contributed, and whether the organization provided any goods or services in exchange for the gift.
To deduct charitable contributions of items valued at $500 or more you must complete a Form 8283, Non cash Charitable Contributions, and attached the form to your return.
An appraisal generally must be obtained if you claim a deduction for a contribution of non cash property worth more than $5,000. In that case, you must also fill out Section B of Form 8283 and attach the form to your return.
Crabtree CPA & Associates Tax Staff attends 2010 IRS National Tax Forum in NYC
Douglas R Crabtree CPA , CITP MST and Evelyn Eidem CPA of Crabtree CPA & Associates, Hyannis, Ma. Recently attended the 2010 IRS National Tax Forum in New York City. The forum offered:
More than 40 seminars and workshops
18 continuing professional education credits
The latest IRS e-Services products
The Practitioner Case Resolution Room
The latest tax professional products and services
Information about upcoming new registration, testing, and e-file requirements for return preparers
The 2010 Massachusetts Sales Tax Holiday Weekend
A recently enacted statute provides for a Massachusetts “sales tax holiday weekend,” i.e., two consecutive days during which most purchases made by individuals for personal use will not be subject to Massachusetts sales or use taxes. St. 2010, c. 240 (“the Act”). The Act provides that the sales tax holiday will occur on August 14 and 15, 2010 and on those days, non-business sales at retail of single items of tangible personal property costing $2,500 or less are exempt from sales and use taxes, subject to certain exclusions. The following do not qualify for the sales tax holiday exemption and remain subject to tax: all motor vehicles, motorboats, meals, telecommunications services, gas, steam, electricity, tobacco products and any single item whose price is in excess of $2,500. The Act charges the Commissioner of Revenue with issuing instructions or forms and rules and regulations necessary to carry out the purposes of the Act.
If you have any questions regarding the sales tax holiday please contact your accountant at Crabtree CPA & Associates. You also can find further details regarding the Sales Tax Holiday by clicking on the following link: http://revenue.blog.state.ma.us/
To temporarily turn off the sales tax collection feature of Quickbooks please follow the directions below.
Open the sales tax preferences.
Go to the Edit menu and click Preferences.
In the Preferences window, click Sales Tax in the list on the left.
Click the Company Preferences tab.
For the question Do you charge sales tax? Select No.
Remember this is only temporary and should be changed back to “Yes” before any business is conducted on August 16th.
Massachusetts Sales and Meals Tax rate
The Massachusetts Sales and Meals Tax rate increased from 5% to 6.25% effective August 1, 2009.
Please visit the MA DOR website for a detailed description on how this affects you.
Our business clients need to update their bookkeeping programs to collect and remit the proper amount.
For our QuickBooks Clients:
While you could simply overwrite the rate on your sales tax item to 6.25% on August 1, please consider the following warning from the QuickBooks Help Index:
“Note: If the sales tax rate for an existing item changes, do not change the rate. Instead, create a new sales tax item with the new rate, and make the old sales tax item inactive. If you change an existing rate, it will impact reports and transactions that occurred prior to the rate change.”
To do this task
1. Go to the Lists menu and click Item List.
2. In the Item list, double-click the sales tax item you need to change.
3. In the Edit Item window, change the Sales Tax Name to “MA Tax 5%”
4. Click the Item is inactive checkbox.
5. Click OK.
6. Next, Create a New Sales Tax Item. Go to Lists, Item List, New Item.
1. Loading, please wait.
7. From the Type drop-down list, click Sales Tax Item.
8. Enter a sales tax name, MA Tax 6.25%
9. Enter a description for the way this sales tax item will appear as a line item on your sales forms.
10. Enter the sales tax rate of 6.25%.
11. From the Tax Agency drop-down list, choose the vendor you’ve set up for paying the Commonwealth of Mass or Mass DOR.
12. Click OK.
13. Finally, go to Edit, Preferences, Company Preferences, Sales Tax. Change “Your most common sales tax item” drop-down to the new Sales Tax Item of 6.25% that you just set up.
For our CBS Clients:
1. Go to Setup
2. Click Sales Tax
3. Change rate from .0500 to .0625
4. Click OK
For our MYOB Clients:
1. Go to List
2. Click on Tax Code List
3. Select the Tax Code
4. Edit the Tax Code – bring up the Tax Code Information and change the rate from 5% to 6.25%
5. Close when done
Money Saving Tips for our QuickBooks Clients!
In today’s economy, what could be better than saving a little money?
For those of you who currently use QuickBooks, we suggest that you take the time to really learn your QuickBooks! Using this training link, you can efficiently, accurately and with confidence, customize your business. Save time and maximize your efficiency by learning to use all of the features QuickBooks has to offer. Make sure your financial information is a valuable asset to you! The more you can accurately accomplish in QuickBooks, the less we have to do: saving you money!
If you have questions or need assistance, please do not hesitate to contact us, as we are here to help!
QuickBooks Training Link Instructions:
Click on Link above
Click on 'Pro'
Click 'Skip Intro'
You can then click through each topic and the program will lead you through the topic you wish to learn.
Cape Cod Quick Books Pro Advisors
The Engagement Letter
A Quick Guide to Crabtree CPA's Engagement Letter Crabtree CPA & Associates prepares and mails engagement letters to all accounting clients - whether they are on a fixed fee retainer or a non-fixed fee retainer.