McKonomics

Feeling Generous? Follow These Tax Rules to Ensure Deductions

To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following guidelines and reminders about the rules:

Guidelines for Monetary Donations

To deduct a monetary charitable donation, regardless of the amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.

H.R. Bill 436: The Storm That Could Destroy Your Estate Plan

Now is the time to proactively implement your estate plan! Why now you ask? Our answer is this....would you consider a potential increase in the value of assets that you intend to transfer to your next generation of up to 40% or more to be important to your estate plan?

Interested? Read on.

Year End Tax Planning - Businesses: Smart Moves To Take Before December 31

As December 31st approaches, where does your business stand on taxes? By making timely moves, you might be able to put a sizeable dent in your 2009 business tax bill. Here are some strategies to consider.

 

Unpack new equipment. This year's economic stimulus law extended the enhanced Section 179 deduction for another year. The maximum deduction in 2009 for business assets is generally $250,000. In addition, you may be able to claim a 50 percent "bonus" depreciation deduction on any excess cost.

 

Reminder: To qualify for either tax break, you must "place the property in service" before 2010.

Year End Tax Planning - Individuals: Mix Old Strategies With New

Tax planning can be critical at the end of the year. Here are some new ideas to contemplate, along with tried-and-true year-end tax techniques.

 

Get a new set of wheels. Under this year's economic stimulus law (the American Recovery and Reinvestment Act of 2009), you can deduct the sales and excise taxes attributable to the first $49,500 of the price of a new vehicle purchased before 2010. However, this deduction begins to phase out if your modified adjusted gross income (MAGI) exceeds $125,000 for single filers and $250,000 for joint filers.

 

Give to charity. If you donate to a qualified charitable organization, you can generally deduct the full contribution amount on your 2009 tax return. Note that donations made by credit card are deductible for this year even if you don't pay the bill until next year. Be aware you must observe strict recordkeeping requirements for all donations.