The IRS just announced that even with the Extenders legislation passing so last-minute, they’ll be able to open the season on-time, as planned, on January 20th.
This means that if you file a paper return before then, it will get held until the 20th, and if you attempt to e-file before then, it will either be held or rejected.
Of course, this won’t affect most of you reading my post, as small business clients usually have to wait until at least February, to make sure they have received all of their info: W-2, 1099 and 1098 forms are not required to be mailed to recipients until January 31st.
Personally, I hold off on e-filing any client returns until February 1st anyway, except in very unusual circumstances, since there are often bugs in the IRS processing software and tax preparation software, and waiting a week or two for these issues to be discovered and resolved is a good practice.
Here’s the IRS announcement: Tax Season Opens As Planned Following Extenders Legislation.
Charlie Russell of the Sleeter Group wrote a nice, short blog post on what’s included in the most recent update to QuickBooks 2014 — take a quick read if you’re trying to decide whether to download/install or not:
QuickBooks 2014 R8 – QuickBooks and Beyond.
It’s about 12 months overdue, but Congress finally passed a bill retroactively extending certain tax breaks beginning January 1, 2014. See more here: Passage of Tax Extenders Contains Key Tax Breaks.
I was chatting with wonderful old friend tonight and helping her with some year-end tax advice, when I found out that she had some misconceptions and missing knowledge about how charitable contributions and volunteer deductions work. I realized she might not be the only one, so here I find myself inspired to spread the word during this time of holiday cheer and giving.
Volunteering — did you know you can deduct 14-cents-per-mile when driving on behalf of a charitable organization during your volunteer work? For example, if you pick up meals from a soup kitchen and deliver them to folks around your city, you can deduct that mileage as a charitable contribution. Or if you drive to visit an elderly person for a regular visit as part of a non-profit Eldercare program. Or if you drive to pick up organic plant seedlings to be sold by a non-profit community garden or a group like Slow Food. The list goes on! Just make sure to log the date, location, number of miles, and purpose (same info as for business mile tracking for the standard mileage deduction).
Non-Cash Charitable Contributions — my friend got the wrong idea from her accountant that it’s somehow difficult or inadvisable to deduct $250 or more when giving away old clothing, household items, or other Goodwill/ Salvation Army/ Brown Elephant-type stuff. Not true! All it means is that you have to fill out an extra form on your tax return that lists the following: what types of items were donated; the fair market value (how much would the usual consumer buy it for at a thrift store); the date of contribution; the name & address of the donee. Thing is, you should be keeping this information anyway, even if the donation was under $250. Only difference is that the IRS requires it to be noted on the tax return for $250 or above.
People often underestimate the value of these used items. I just use a spreadsheet with columns: ITEM; VALUE; QUANTITY; TOTAL (quantity times value). Then I add up the TOTAL column. Easy peasy. However, I’ve also worked with clients who use the tool “It’s Deductible”, by Intuit which has a free version they use to try to entice you into buying their Turbo Tax product. But it’s a good tool, worth trying — https://turbotax.intuit.com/personal-taxes/itsdeductible
Charitable Contributions via cash, check or credit card — Lastly, here’s a nice little list of tips from the IRS on deducting Charitable Contributions. It’s such a great way to lower your tax bill, and give back to the causes that move you, or to “invest” in your own community. Don’t forget to check out your charities on http://www.charitynavigator.org to make sure they’re using your dollars efficiently. Happy Giving!
Eight Tips for Deducting Charitable Contributions.
Because the IRS wasn’t underfunded and overburdened enough. I personally find it unfair that Congress keeps increasing the IRS’s responsibilities, forcing them to oversee programs that were never part of the deal in the past, but decreases their budget every year. Who suffers? Accountants and taxpayers dealing with overworked and undertrained IRS staffers.
Congress Slashes IRS Budget Another 3 Percent.
Extra, extra! This just in!
Beginning on Jan. 1, 2015, the standard mileage rate will be 57.5 cents per mile for business miles driven, up from 56 cents in 2014.
via IRS Raises Standard Mileage Rate for Businesses.
The House finally passed the 2014 extenders, and we’ll see what happens in the Senate.
House Passes $42 Billion Plan to Revive U.S. Tax Breaks for 2014.
(I don’t think this should be a Democrat or Republican issue — it’s obvious to all of us in taxation that if you only ever extend tax breaks retroactively, they are extremely ineffective at generating the additional economic benefit for which they were originally intended. Plus, it makes tax planning a major and unnecessary headache!)
Ran across this relatively recent article on 9 business apps released in 2014 that are worth a look. I’m especially interested in Mailbox, as I am one of those users whose email inbox doubles as a to-do list to some extent. I like the idea of hiding an email and returning it to my inbox on a specified date. Lingua.ly sounds like an app that might get me back on track with my abandoned Spanish and French skills — articles based on my interests, but in foreign languages.
I already use Hightail for sending large/secure files, but WeTransfer sounds like a nice, less secure, much cheaper version that I can imagine some of my clients using, as well as a couple of the time-tracking, mileage-tracking, flight-tracking products noted. Worth a quick read.
9 of the Best New Business Apps of 2014 | QuickBooks.