Archive for the ‘Taxes’ Category

Tis the Season of giving – Ways of Giving and Tax Tips

December 23rd, 2009 Vijaianand

In the last blog post, we saw the essence of true giving and free tools available to find an organizations that suits your lifestyle or passion to start thinking about donating. This post, we are going to see few different ways one can give and help. Also we will look at some Tax Implications of gift giving.

There are variety of ways to contribute, donate or give. A donation doesn’t have to be big and it doesn’t have to be money either. It is giving heart that matters. Let’s categorize charitable gift giving into two ways as Direct and Indirect.


I. Direct Donations


Cash is king whether it comes to businesses or non-profit organizations. At this tough economic juncture, it is not just the individuals and corporations which are feeling the pinch. Many non-profit organization are experiencing big hit in their donation dollars. This year Good will, Salvation Army and many other organizations has reported a decline in their donation. They need our help more than ever in this tough times. Giving Cash is a great way to show your support and it has a direct impact to the cause. Many organization now accept credit cards for donation.  But there are certain limitation to cash gifts in regard to Taxes. We will look at them later below.


II. Indirect Giving


1. Give by Gift Cards

You can buy charity gift cards at sites like http://www.tisbest.org/, www.charitygiftcertificates.org and www.JustGive.org. and give to the reciepent. He/she can spend or use the gift card and donating to their favorite society. It is a great feeling for both you. You give him the gift, he/she gifts to the favorite charity. Also there are lot of webistes which accepts unused store giftcards and donate the proceedings to charities. If you have a macy’s gift card which has balance of $2 or something. Many of us just threw it away because we won’t be able to buy anything using the small money left over. Instead, you can just give it away to charities by using these websites.

2. Don’t donate but Lend or Loan

I don’t believe in just giving  away money unless it is tipping somebody. Because the recepient will be back again to street asking more. It is better to help them find a job and make them work feed themselves. Like the chinese saying, “Don’t give them fish, instead teach them how to fish“.  There are few organizations like Kiva.org and UnitedProsperity.org which provides the platform to do just that. They help the donor to lend/loan money directly to aspiring Entrepreneurs in the developing countries. I started myself few months ago in both these websites and started lending and helping people.


 



3. Shop and Donate


It is called Cause related Marketing and are Selfish giving. Starbucks is helping to fight AIDS in Africa. Macy’s is giving to the Make A Wish Foundation. And Toys “R” Us is giving to Toys For Tots Many more retailers and manufacturers are partnering today with not-for-profit organizations in cause-related marketing campaigns. On one hand, these campaigns raise awareness, support, and donations for social causes such as global hunger relief. On the other hand, they enhance corporate reputations, customer loyalty, and financial gains for companies.

An example of cause-related marketing is an effort organized by Macy’s, Pfizer, and other businesses on behalf of the American Heart Association. The program has raised over $32 million in donations for the charity, while generating over 1 billion media impressions for corporate sponsors. So just buy shopping in these stores, you are indirectly benefiting some non-profit organizations. Whether you call this has selfish giving or not, it is at least benefiting somebody thats what matters. There was an article/report posted in npr about this cause related marketing. Check it out.


III. Volunteer your time


Time is precious and it has value. If you strapped with cash, you can also give your time. There are lot of local charity organization like hospitals, resale shopes which migh need help during this holiday times. You can always take time to volunteer and even claim those hours in your Tax returs. Talking of taxes, now its time to check what are the ways we can benefit from gift giving.


Tax Advantages


Giving not only satisfy our inner soul but also helps to save and get some money in return as an appreciation from Uncle Sam. Tax incentives is an added bonus encouraging many to contribute.


For charitable contributions of less than $250, you must keep a canceled check, credit card receipt or electronic funds transfer receipt. Or you must have a letter from the charity acknowledging receipt of the contribution and stating its date and amount. For charitable contributions of $250 or more, you’ll also need a written receipt from the charity substantiating the amount of cash contributed and a description (but not the value) of any property — other than cash — contributed.


And you must disclose whether the organization provided any goods or services (such as a theater ticket or dinner) in return for the contribution.
If you donate property, such as clothing, valued at less than $250, you must keep a receipt from the charitable organization showing the charity’s name, contribution date, physical location of the contribution and a detailed description of the property (but not its value).


For larger donations, you’ll need even more documentation, including a description of how you acquired the property (purchase, gift, inheritance), the date you acquired the property and the original cost of that property. Donated property worth more than $5,000 requires a qualified appraisal, as do lesser-value objects that aren’t in “good” condition.


Conclusion


“Giving from a full heart is one of the most joyous things you can do…“,  – from the book “The Secret”.

Make this holiday season special by donating your time or money in any above ways. It will surely sooth your soul and even make your pocket happy by getting some back so you can continue giving.

Happy Holidays!!

Sources: Internet website relate to charity giving
Photo source: www.oregon-crna.org

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Tis the Season of giving – But wait…

December 17th, 2009 Vijaianand

It is the time of joy and merriment. The festive season is all about fun family time, holiday parties, gift exchanges and giving gift. Gift giving has been a tradition for many decades. But how many of you really get the gifts which you really like and how many of you really know what you want to buy for your cousin this christmas.


According to Waldfogel, an economist at the Wharton School of the University of Pennsylvania,  gift giving is a Holiday waste.


He makes the case in his book, Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays.  He says, when you buy something for yourself, you will only spend, say, $50, if you look it over and decide it’s worth at least $50 to me. When someone else sets out to spend $50 on me, they’re at a real disadvantage. They don’t know what I like unless they are real close to you. They don’t know what I have. There’s just no guarantee that what they buy will be worth at least $50 — or more — to me. So it real waste of money. And what the data show is that, on average, stuff that other people buy as gifts is worth 20 percent less per dollar than the stuff we buy for ourselves. And so, in that way, when we go out and spend money on gifts, we’re destroying a lot of value.


It’s not so much that people shouldn’t give gifts, period. It’s that you should give gifts when you have a fair shot at doing well. And so those are the people you know well and, frankly, the people you care about. He recommends, it’s often better (more efficient) to simply give cash or pre-paid gift cards. You can read more about this Holiday Gift waste in his book, Scroogenomics.

At the sametime, Holiday season is not just about giving gifts to friends and family, it is also about giving the gift of hope and happiness to most needed ones. Charitable giving  is a big aspect of the holiday season. Whether you make a difference in one’s life or just make one smile by showering gifts in this holiday season, it will surely piles up good karma in you.


“What you think about and thank about, we bring about” – Dr. John Martini in the book, “The Secret”.

An inspiring quote from an excellent book which I recently read and strongly recommend. It just reforces the fact that “Think and Do good things, it will bring good things to you“. This very thought is the prime reason for many millionairs who spend millions in philanthropy. By doing so, they continue to attract more money and become more rich while many of us are worrying about living pay check to pay check. That’s the difference in mind set. 

We worked hard and devoted all our attention in making money, saving money and investing money all this year for the future. It’s hard to think seriously about giving money away. It is even harder for many without job in this tough and challenging year 2009.  But the good news, the year is almost over and recession has come to an end at least in papers. That’s big sign of relief. We all can only hope for the next year to bring greater perspectives in both job and economic front through outall over the world.


While we wait to welcome the New year, many of us should be lucky and grateful to have a reasonable job and a decent life. Instead of cribbing about not enough money to donate or give way, we should open our heart and show our gratitude by giving and helping others in need.

How can you contribute?


Whether it is small or big, capacity doesn’t matter. What matters the most is the Charitable thought. There are lot of ways you can give especially suiting your life style, you life goals, your passion and more. If you are pet lover, you can give to Humane Society to protect animals. If you want to encourage kids education, you can donate to globalgivingeducation funds. If you care about developing nations, you can give gift to world relief. With webspace loaded with gift giving advices, you better do your research to find the right option and avenue to route your money to the right place. Here is some help to do some true gift giving.


Tools – Charity Finder


It’s easy to check on a charity’s business practices to make sure the bulk of your contribution is going toward the cause you select, instead of being spent on fund-raising expenses or salaries. There are web sites like www.CharityNavigator.comand www.GuideStar.org allow you to search for a charity by name or cause, as well as view and compare their annual IRS filings under Form 78, which details their expenses and costs.

 
Websites like http://www.goodsearch.com/and http://www.searchkindly.org/are search engines that donate a portion of their revenue to the charities and schools designated by its user.

We will see more about different ways of gift giving and possible Tax Implications in the next blog post.

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Stimulus Bill 2.0 & Taxpayers Tax credits and more – Final Part

May 4th, 2009 Vijaianand

We been looking at Obama Tax credit in series of blogs (Taxpayer Tax credit, New Home buyer Tax credit and Energy Credit) adding my personal view on each of them and how we tax payers can take advantage of it. This is last part of the blog series which talks about unemployment insurance help and other credits.

Unemployement Benefits: Jobless get a little extra help

Many of those who are unemployed will get a boost from the stimulus bill,including a $25 increase in weekly benefit checks through 2009 that should help not only those who are out of work but the broad economy as that money gets spent.

Currently, the nationwide average weekly check to those receiving unemployment benefits is $295.05, ranging from $179.08 in Mississippi to $408.28 in Hawaii, according to the National Employment Law Project. Increasing payments is a good way to stimulate the economy, because, “You can get money into the hands of people right away” as per analyst.

And people who are unemployed are likely to spend it. More than 4.8 million people were collecting unemployment benefits at the end of January, up 78% from a year earlier and the highest since records began in 1967, the Labor Department said.

The bill includes other measures to help those who have lost their jobs. They are:

•Lengthen the period in which people can be eligible for extended unemployment benefits. The program, which provides up to 33 weeks of extra jobless benefits after workers exhaust the regular 26 weeks received in most states, was passed last year and was set to expire at the end of March. Under the stimulus bill, the extended benefits would be available through the end of 2009. The NELP estimates this will help about 3 million people.

•Provide money to states that agree to make benefits available to more workers. That would help at least 500,000 people, including some low-wage and part-time workers, who wouldn’t otherwise receive unemployment benefits, the NELP says.

•Suspend the taxation of unemployment benefits up to $2,400.

The measure also helps the unemployed and others by increasing the maximum monthly food-stamp benefit by 13%, which lawmakers estimate will help 31 million Americans, half of them children. And the bill provides a subsidy to cover 65% of a worker’s COBRA health insurance premiums for up to nine months. COBRA lets workers continue their former employer’s coverage for at least 18 months.

Vijai’s 2cents:

It is really a much needed help the unemployed. Unless you experienced the unemployment, it hard to understand how each dollar values. So I would give 100% kudo’s to Obama adminstration on this benefit. Adding on top of it, suspending the taxation upto $2,400 is a bonus. Every dollar adds value to these jobless folks.

Other tax provisions in the stimulus package:

•An expanded earned income tax credit and child tax credit for low-income families.

•A higher education tax credit. Parents of college students would be eligible to claim a tax credit of up to $2,500. The credit is more generous than the existing Hope Scholarship Tax Credit, which maxes out at $1,800 and is available only for the first two years of college, says Amy McAnarney, executive director of H&R Block’s Tax Institute. The tax credit, which would be available in 2009 and 2010, phases out for single taxpayers with AGI of $80,000 to $90,000 and married taxpayers with AGI of $160,000 to $180,000.

•A stopgap measure designed to prevent the alternative minimum tax from hitting more than 24 million households in 2009. The AMT was designed to prevent extremely wealthy taxpayers from using loopholes and deductions to avoid taxes. But because it was never indexed to inflation, it has expanded to encompass more upper-middle and some middle-class taxpayers. About 4 million owed the AMT last year.

These are just few other credits which many of can take advantage either in this year tax return by filing an extension and save for next year.

Here is a nice article from kiplinger on 7 misconception about tax credit.

I hope this series of blogs about obama’s tax credits with my detail insights on how you can make use of it were helpful. I will come back later with an interesting topic from my valise.

Some content source courtesy: usatoday.com

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