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Making a Charitable Donation This End of Year? Brush Up on this Matter to Make it Deductible

Towards the end of every calendar year the IRS publishes its tips for year-end gifts to charity. If you made a charitable contribution this year or will be making one this end of year, brush up on these rules and tips.

WASHINGTON ― The Internal Revenue Service today reminded individuals and businesses making year-end gifts to charity that several important tax law provisions have taken effect in recent years. Some of the changes taxpayers should keep in mind include:

Rules for Charitable Contributions of Clothing and Household Items

Household items include furniture, furnishings, electronics, appliances and linens. Clothing and household items donated to charity generally must be in good used condition or better to be tax-deductible. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return.

Donors must get a written acknowledgement from the charity for all gifts worth $250 or more. It must include, among other things, a description of the items contributed.

Guidelines for Monetary Donations

A taxpayer must have a bank record or a written statement from the charity in order to deduct any donation of money, regardless of amount. The record must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, and bank, credit union and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

These requirements for the deduction of monetary donations do not change the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet both requirements.

Reminders

The IRS offers the following additional reminders to help taxpayers plan their holiday and year-end gifts to charity:

  • Qualified charities. Check that the charity is eligible. Only donations to eligible organizations are tax-deductible. Select Check, a searchable online tool available on IRS.gov, lists most organizations that are eligible to receive deductible contributions. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations. That is true even if they are not listed in the tool’s database.
  • Year-end gifts. Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2014 count for 2014, even if the credit card bill isn’t paid until 2015. Also, checks count for 2014 as long as they are mailed in 2014.
  • Itemize deductions. For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction. This includes anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceed the standard deduction. Use the 2014 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.
  • Record donations. For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value. Additional rules apply for a contribution of $250 or more.
  • Special Rules. The deduction for a car, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C or a similar statement, must be provided to the donor by the organization and attached to the donor’s tax return.

If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.

IRS.gov has additional information on charitable giving, including:

Source: IRS.gov

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California senate approves right to die legislation (SB 128)

Modeled on a law first enacted in Oregon in 1997, California Senate Bill 128 would permit doctors to provide lethal drugs to patients with less than six months to live. The measure passed 23-14, over passionate objections from Republicans who argued it devalues life.

The California Senate on Thursday took a key step toward being the sixth state to pass a controversial “Death with Dignity” bill, two weeks after the California Medical Association dropped its 28-year opposition to such legislation.
Other states include New Mexico, Montana, Washington, and Vermont. The bill now advances to the California Assembly, where the deadline to pass the legislation is Sept. 11.
The Senate vote came seven months after the debate in California reached a climax with the death of Brittany Maynard, a 29 year-old Californian with terminal brain cancer. She moved to Oregon to be one of the 750 people in the state to take advantage of the medically assisted dying law it passed in 1997.

Opposition came from a leading family values organization in California, which says vulnerable people will be pressured to die prematurely now that Democrats in the state Senate are promoting suicide as official state policy.
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Summer Camp’s New Duties to Disclose

California’s Sixth District Court of Appeal has ruled that summer camps, as daycare providers, have a duty to minors and their parents to disclose suspected molestation by camp employees, a duty beyond simply caring for the campers.

The case arose after parents brought suit against Keith Edward Woodhouse and his employer, Camp on the Hill, a summer camp for first through sixth graders run by the First Baptist Church of San Jose.  Woodhouse had been repeatedly reported for inappropriate behavior with children, yet parents were never informed as the camp elected to turn their backs on the issue.

Special Relationship Triggers Duty

As with previous decisions in California, the Appeals Court decided, as a day care provider, acting in loco parentis, it had a special relationship which imposed a duty to prevent harm to the minors attending the camp and the general duty to act reasonably.  The California Supreme Court had previously found that therapists have a duty to third parties endangered by their clients to disclose credible threats against those third parties. State appellate courts have found a special relationship between a school district, a student and her mother, imposing a duty to disclose molestation by another student.

 

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Starbucks & PayPal Security Breach

Starbucks

If you frequent Starbucks often and make use of the mobile phone app, check your account and credit(s) in the wake of the aftermath following Starbucks’s security breach in June, 2015.

Some Starbucks card holders and mobile app users recently received a disturbing announcement that some users had their Starbucks accounts drained without using an account number.

In certain instances, Starbucks was able to credit accounts following fraudulent transactions. However, in some circumstances, users were required to act on their own and dispute charges directly with their banks and/or credit card companies.

Paypal

This year has definitely been a bad one for cyber security and data breaches, especially for users using mobile applications. Payment giant, PayPal, also had their accounts hacked this month.  Researchers at Michigan-based Duo Labs identified a vulnerability in PayPal’s two-step security mechanism for mobile users — a mechanism similar to those used to protect some bank and e-mail accounts. Breaches of two-factor authentication – after users enter a username and password, a code is sent to the user’s cellphone to confirm their identity – are rare.

Lesson here: keep a close eye on your accounts maintained in your mobile phones. Second, immediately notify responsible companies of any suspicious activity, and third, change your passwords frequently. The Starbucks hack seems to be partly enabled by hackers recent intrusion into customers’ weak Starbucks account passwords to steal hundreds of dollars in minutes.  The PayPal hack is a sign of sophistication developing in hackers’ knowledge of available security measures.