Yup.  There’s a form for that, too.

Chef Louie was in a pickle.  It was tax season.  And those taxes weren’t going to prepare themselves.  Cash was tight.  Despondently, Chef Louie walked down the street with his hands in his empty pockets.  Then, Hark!  What was that?  He heard of a guy, Tax Man Stan, who was into barter.  No money changes hands?!  Could there be a way out?  Chef Louie’s spirits were rising like a double decker devil’s food cake.

They met.  Tax Man Stan’s ex-wife Nan had been needling him to provide something for their daughter Fran’s baby shower.  Tax Man Stan agreed to do Chef Louie’s $650 taxes, and Chef Louie agreed to cater $650 worth of pink and blue themed delicacies.  They smiled, shook hands, and got to work.

Obamacare Paperwork for the 2015 Tax Season

By now, everyone should know there are new tax forms relating to your health insurance, and that you need these new forms in order to do your 2015 income taxes.  You also need these forms in order to avoid (what is essentially) a fine for not having minimum essential health insurance!

The Forms are 1095 A, B, and C.

Because it isn’t what you think it is…

Individuals!

In Washington DC, there is a holiday called Emancipation Day.  This year, it falls on Friday, April 15.  Due to this, the basic federal income tax deadline has been changed to Monday, April 18.  Most states will follow suit, just because it is easier to have the same deadline. This is a one-time change.

Businesses!

Beginning next year, for the 2016 federal income tax filings happening in 2017, the due dates for some forms will change.  This is a permanent change!  Here’s the list:

Okay, business owners, here we go! Your favorite task of the year:  1099s!

What is the dollar limit?

If total payment for the year is $600 or more, issue a 1099.

If total payment for the year is under $600, ignore the 1099.

Who might get a 1099?

Anyone who provided a service for you in 2012.

Here is a list of common services.  The list is not complete. Contact me if you are unsure.

No act of kindness, no matter how small, is ever wasted. – Aesop

What’s left?  How about really big stuff, like cars!

You hear it on the radio all the time.  Various charities trying to outdo one another in the attempt to get you to let them have your old car.  How does that work, anyway?  Is it really worthwhile?

I can’t speak to the value to the individual organization. Are they really turning clunkers into cash? Or is it just some kind of keep busy activity for a certain segment of their population? Once again, I’m not a sociologist, and I’m not worried about it. As long as your paperwork is in order, you don’t have to worry about it, either.  Keep reading!

Charity begins at home, but should not end there. – Thomas Fuller

In addition to money, many people give ‘stuff’.  Used clothing.  Outgrown toys.  The old couch.  As with money, as long as you give it to a qualifying organization, ‘stuff’ can qualify as a charitable contribution and be taken as a deduction on your income taxes.

Many people give their used stuff to Goodwill.  I think this is because the folks at Goodwill Industries have gone out of their way to make it easy for us to find them.  There are many other organizations that accept donations of stuff.  There is one that is very good at sending a truck to pick up, but according to my clients, fairly bad at providing any kind of receipt.  Be careful.

Ask not what your country can do for you, ask what you can do for your country. – John F. Kennedy

What exactly is a 501c3 organization?

This is IRS code for a properly registered and functioning charitable organization here in the United States of America.  You can look up most IRS qualifying charities with their Exempt Organizations Select tool.  “Most” is as close as you can get because a) the list is ever-changing, b) not all churches are registered because they are automatically tax exempt, and c) governmental units don’t have to register.

Real charities issue receipts, or acknowledgement letters, often disguised as mushy thank you notes.  The letter needs to specifically state the value of your charitable donation.  It needs to state something like “no goods or services were received in exchange for the donation.”  If possible, it will also state that the organization is a 501c3 organization.  Oh – and it has to have a date, and be issued before the taxes are due.

We make a living by what we get, but we make a life by what we give. – Winston Churchill

It happens every tax season.  I ask a new taxpayer about their charity, and I get, “Put me down for the maximum.”  Folks, I hate to have to tell you this, but there is no maximum.  There is no standard amount for charity that you can just use as a default, absent of any documentation or even actual giving.  I confess I sometimes wonder if it might be years and years of systematic abuse of line 19 that has driven the IRS to such nitpicking specificity for the documentation of this one deduction.

Let’s start at the beginning.

Here in the USA, a lot of taxes are paid, and in a variety of ways.  For income taxes, folks are still allowed a deduction for charitable giving.  This deduction is taken on Schedule A, lines 16, 17, 18 and 19.