The IRS Deductions Blog

Posts Tagged ‘charitable’

Question: Are my 82nd Airborne Division Assosiation membership dues tax deductible as union dues?

seems like they would be, but I’m not sure

Answer: anyone who says they aren’t mandatory union dues hasn’t served in the 82nd. they might as well be. but no u can’t claim them like that. you probably can under a non profit organization donation though.

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Happening Today

WEDNESDAY, JULY 13

The Artists Studio Tour Voted “The Best Art Event” in the Ha

Question: Can a small charity solicit tax-deductible donations without becoming a 501 (c) 3?

I help run a youth organization that is under the umbrella of a municipality but looking to become independent. I understand that we would first need to become incorporated. I also read that the IRS says if our annual revenue is less than $5000 a year, we would not need to filed Form 1023 to get 501 (c) 3 status. Our revenue will be less than $5000/year at this point. The IRS will automatically consider us tax-exempt without having to file a Form 1023. My question to you is can we solicit donations that individuals and businesses can write off on their taxes if the IRS says we don’t need to file Form 1023? I want to make sure folks can write off donations to our organization. But if we don’t have to file Form 1023 to do that, that would be great. Anybody know the answer to this?

Answer: You’ve misread the rules and you’re confusing what it means to be tax exempt vs being a charity.

Any organization that exists for a purpose other than making profits is a non-profit organization and they can be tax exempt. This does not mean they are a charity, it only means the organization itself doesn’t have to pay income taxes like a business would pay income taxes. The rules you read were saying that if your organization’s total revenue was less than $5000/ year, you automatically get this tax exempt status but if the revenue is $5000+ then you have to fill out form 1023 to let the IRS know that its a tax exempt non-profit.

Being a 501(c)3 organization means that the organization exists for the purpose of giving back to the community in some form. Contributions to these organizations are tax deductible for the giver as a way of encouraging people to give money to these types of organizations.

As an example of an organization that would be tax exempt (non-profit) but not a 501(c)3 charity, think of a political campaign. These organizations pop up every election year and take donation money so they can run radio ads telling you to vote yes on proposition X or No on initiative Y. The organization doesn’t make a profit so they don’t pay income taxes, but they’re not really doing anything that benefits society so the contributions people make to the organization are Not Tax Deductible.

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Alumni rally to preserve Governor’s School

Supporters of the North Carolina Governor’s School are working in overdrive to make sure the longtime program doesn’t become another victim of the state budget’s cuts to education.

Bike Cam: Out of the Sky… bicycling at 14000 ft (4300 m)

Question: My group is an IRS exempt organization, but not a 501c3. How can we change designation to a 501c3?

Volunteer Firefighter Association: The person in charge before me listed us as a “Code 6″ (an organization described in section 170(c) other than a charity) & “Code 7″ (An organization to which contributions are deductible if made for the use of a goernmental unit.), but I believe that is incorrect. I am pretty sure that we are a 501c3 instead. Many years ago, funds were donated to support the fire department, now, the funds strictly support the volunteers. The department is now paid by tax dollars and mostly paid firefighters.
Thanks for the responses. Our association does ease the burden on the city by purchasing uniforms, etc for the volunteers so the city doesn’t have to.
Reason to change: I think most people (like myself) don’t understand the tax code and are hesitant to donate if an organization is not a 501c3. Additionally, my employer (and a few other volunteers) will match my hours with a donation, but only if the org is a 501c.

Answer: Whether your association can be a 501(c)(3) depends on what money contributed to the association will do. A volunteer firemen’s relief association that receives contributions that benefit only the volunteers and their families cannot be a 501(c)(3). If your organization exists only to provide disability and/or retirement benefits to members, then it cannot qualify. For a firemen’s association to qualify, it must “lessen the burdens of government.” If contributed money goes toward training volunteers to fight fires, for example, this is considered to be lessening the burdens of government.

If you wanted to change to a 501(c)(3), you would have to complete Form 1023 and wait for the IRS to rule. It’s a pretty complicated form, and quite a bit of narrative writing and documentation is involved.

So I have to ask, why it would matter so much whether you are a 501(c)(3) or a different type of organization described in section 170(c)? Whether or not you’re a 501(c)(3), contributions to the association will be tax deductible. That’s what section 170(c) permits–deductions for contributions to various kinds of organizations, including 501(c)(3) and others.

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Secret donations and gift tax _ a new conundrum

Outside poltical groups and the 35 percent gift tax _ a legal muddle for big donors

Churches to defy IRS on sermons Church and State uniting?

Question: how do charitable Tax Deductions work?

Ok so if my husband is making past the 100k annual bracket. We are obviously getting taxed tens of thousands. So theoretically speaking, lets say I get taxed $28,000 this year. If I donated $20,000 to charity (non profit) will my tax “deduction” lower my annual tax to just $8,000…. or does it work in a differe way
omgosh please help!!!

Answer: No, the deduction would reduce your taxable income by $20,000. The value of that depends upon your tax bracket and any other Itemized Deductions that you have. You’re in a 25% tax bracket with a standard deduction of $10,700 so if it was your ONLY itemized deduction then it would reduce your tax by $2,325.00 — .25*(20,000-10,700). If you already had at least $10,700 in itemized deductions it would reduce your tax by $5,000.

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High-income taxpayer alert: 2010 is year to give

The Tax Foundation warns that restrictions on itemized deductions return next year – so high-income taxpayers mulling major charitable giving should act this year. “The federal individual income tax has, since its inception, allowed for …

Watch the Toronto fire services being tricked by scientology *protected by faire use*

Question: Can gifts to business associates be a tax deduction in Canada?

I run a small business, I have bought gifts to my suppliers and customers. Can I use these expenses as a tax deduction? (Canada)

Answer: yes, its an allowable tax deduction as long as the gift is under $750 in value, and not taxable in the hands of the recipient.

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The Tax Deductions most often overlooked

Every year, the Internal Revenue Service dutifully reports the most common blunders that taxpayers make on their returns. And every year, at or near the top of the “oops” list is forgetting to enter their Social Security number at the top of the tax form — or making a mistake when entering those…

Make a Year End Tax-Deductible Gift at ARCW.org