Rebella Accountancy | 507 E. First Street, Suite A | Tustin, CA 92780 | Phone: 714-619-0667 | Fax: 714-544-0236

       

 

 

Monica Rebella, CPA/IAR - President

Rebella Accountancy

 

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Feature Articles

- Sweeping new IRS 'repair regulations' impact most businesses
- Congress begins work on payroll tax extension as White House unveils new proposals
- IRS launches third version of voluntary offshore disclosure program
- The Saver's Credit: An underused retirement savings benefit
- Using fringe benefits as an income substitute during the economic downturn

How Do I?

- Claim a charitable contribution of property?
- obtain an appraisal for a noncash charitable contribution
- Compute gain in a like-kind exchange when some cash is received
- How do I? Deduct a contribution of clothing or a household item under the new rules?

Frequently Asked Questions

- When do I need to file IRS Form 8938, Statement of Specified Foreign Financial Assets?
- When is the best time of year to contribute to an IRA?
- How does a 60-day loan from an IRA work?
- What if I owe taxes and can't pay the full amount?
- How does the new sales tax deduction for vehicle purchases work?
- How much proof is enough, when contributing used clothing to charity?

 

 

 

Reducing Your Taxes:  If I Play Golf & Take Lessons, Can I Deduct Them?


Question - I will play golf 40 times this year, 30 times in connection with properly documented deductible entertaining of prospects and 10 times for personal purposes.

To make my play acceptable to my business prospects, I have taken six golf lessons at a cost of $900. May I deduct the cost of the lessons?

Answer Yes. The golf lessons improve the business skills you need in your prospecting. You are somewhat like Tracey Topping, who used her equestrian events as the marketing muscle for her barn and home design business.

The court allowed her to deduct the cost of her equestrian trainers. Topping needed the trainers so that she could win events and have her name announced over the loudspeakers as the rider of the winning horse.

You are also somewhat like the air traffic controllers who won education deductions for private pilot certification courses, aircraft rentals, and flying lessons, as this education improved their air traffic skills.

Alan Aaronson won an education deduction for his flying lessons because he proved that being able to fly improved his abilities as a news photographer.

How do you get this deduction? The first thing you need to assert is how those golf lessons improve your prospecting. For example, your improved play

- might help you gain access to new and different prospects.

- may give you more business prestige and standing with the prospect group you currently access (thereby improving business).

- might simply keep you as you are, thereby maintaining the skill that you need in your business prospecting.

Next, you need to allocate the cost of the golf lessons to three possible categories, as follows:

1. Personal nondeductible golf (which you said is 10 out of the 40 times you will play golf,
or 25%)

2. 100% deductible charity event golf (if you participate in such charity events)

3. Regular business entertainment golf (which you said is 30 out of the 40 times you will play golf)

( taken from the Bradford Tax Institute )

Click Here To Learn Why When Your Bring Your 2011-2012 Taxes To Us And You’re Entered Into a Drawing For a 50-Inch Large Screen TV!

   

Deducting Charitable Contributions: Eight Essentials

Donations made to qualified organizations may help reduce the amount of tax you pay.

The IRS has eight essential tips to help ensure your contributions pay off on your tax return.

1. If your goal is a legitimate tax deduction, then you must be giving to a qualified organization. Also, you cannot deduct contributions made to specific individuals, political organizations or candidates. See IRS Publication 526, Charitable Contributions, for rules on what constitutes a qualified organization.

2. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. If your total deduction for all noncash contributions for the year is more than $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.

3. If you receive a benefit because of your contribution such as merchandise, tickets to a ball game or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received.

4. Donations of stock or other non-cash property are usually valued at the fair market value of the property. Clothing and household items must generally be in good used condition or better to be deductible. Special rules apply to vehicle donations.

5. Fair market value is generally the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.

6. Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization and the date and amount of the contribution. For text message donations, a telephone bill meets the record-keeping requirement if it shows the name of the receiving organization, the date of the contribution and the amount given.

7. To claim a deduction for contributions of cash or property equaling $250 or more, you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization showing the amount of the cash, a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirement for all contributions of $250 or more.

8. Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which generally requires an appraisal by a qualified appraiser.

For more information on charitable contributions call my office at 714-619-0667, or refer to Form 8283 and its instructions, as well as Publication 526, Charitable Contributions. For information on determining the value of donations, refer to Publication 561, Determining the Value of Donated Property. All are available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).  ( taken from IRS Tax Tip 2012-57 )

click here to listen to this video update on:

click here to listen to this video update on:

   

I read an article in SmartMoney magazine recently that I wanted to pass along to you titled: 5 Little-Known Tax Deductions by Bill Bischoff where he talks about it being possible to write off some expenses that were paid for by someone else such as:

  1. Medicare Insurance and Long-Term Care Premiums
  2. Medical Expenses Paid by Someone Else
  3. Real Estate Taxes Paid by Someone Else
  4. Home Mortgage Points Paid by Someone Else
  5. Fees to Charge Taxes to Your Credit Card


      Click here to read the article online.

   

 

Employee Business Expenses

 

Some employees may be able to deduct certain work-related expenses. The following facts from the IRS can help you determine which expenses are deductible as an employee business expense. You must be itemizing deductions on IRS Schedule A to qualify.

Expenses that qualify for an itemized deduction generally include:

- Business travel away from home
- Business use of your car
- Business meals and entertainment
- Travel
- Use of your home
- Education
- Supplies
- Tools
- Miscellaneous expenses

You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on the IRS website at www.irs.gov, or by calling 1-800-TAX-FORM (800-829-3676).

If your employer reimburses you under an accountable plan, you should not include the payments in your gross income, and you may not deduct any of the reimbursed amounts.

An accountable plan must meet three requirements:

1. You must have paid or incurred expenses that are deductible while performing services as an employee.

2. You must adequately account to your employer for these expenses within a reasonable time period.

3. You must return any excess reimbursement or allowance within a reasonable time period.

If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses.

Generally, you report unreimbursed expenses on IRS Form 2106 or IRS Form 2106-EZ and attach it to Form 1040. Deductible expenses are then reported on IRS Schedule A, as a miscellaneous itemized deduction subject to a rule that limits your employee business expenses deduction to the amount that exceeds 2 percent of your adjusted gross income.

For more information see IRS Publication 529, Miscellaneous Deductions, which is available on the IRS website at www.irs.gov, or by calling 1-800-TAX-FORM (800-829-3676). 
( taken from IRS Tax Tip 2012-54 )

To read this & my other articles online go to www.MyDentalCPA.com and click on the Newsletter section.

 


 

As always you can call me at 714-619-0667 if you have any questions about investing, retirement or any other tax & accounting related issues. 

 

Regards, Monica Rebella, CPA/IAR

President, Rebella Accountancy

 
Disclaimer:  The opinions contained herein are not intended to be investment advice or a solicitation to buy or sell any securities. With any investment you should carefully consider the investment objectives, potential risks, management fees, and charges and expenses before investing.  Past performance is not a guarantee of future results. The investment return and principle value of any investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.

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Monica Rebella, CPA/IAR | President - Rebella Accountancy | Certified Public Accountants
507 E. First Street, Suite A | Tustin, CA 92780 | Phone: 714-619-0667 | Fax: 714-544-0236
Email: mrebella@rebellacpa.com | www.RebellaCPA.com | www.MyDentalCPA.com