Posts Tagged ‘Guidestar’

Work or Pleasure?

Thursday, June 30th, 2016

Make Traveling for Charity Part Of Your Summertime Tax Savings Strategy

Travelling for Charity - Ohio CPA Firm

Transportation to and from the job site via plane, train or automobile are deductible on your next tax return if you will be volunteering your time and talents this summer. This includes any transportation costs accrued for travel between the airport or train station and your hotel. Read on to learn more!

In addition to planning a fun family get-away this summer, you might want to carve out some time to donate your services to a noble cause as well. For all of you summertime volunteers, listen up and make plans to use some of your travel expenses to help lower your tax bill. Here’s how.

Read Also: Can My Summer Daycare Expenses Earn A Tax Credit?

  • Make sure you are volunteering your services to qualified charities. If you want to deduct your expenses, the IRS needs to know that the charity you are working with is legit. There are several great online resources that can help you determine if the organization you are helping out is qualified. The IRS’s EO Select Check tool and Guidestar are two of my favorites.
  • Track all out-of-pocket expenses. If you are making necessary purchases that are not directly connected with the services you are performing and are not considered personal living or family expenses; and these expenses were directly result of the volunteerism opportunity, then you may be able take a deduction on your tax return. Keep in mind that you also can’t receive reimbursement by any other means. The ability to deduct out-of-pocket expenses, particularly travel expenses, has huge savings implications. Some of the types of expenses you can deduct include:
    • Lodging
    • Meals
    • Transportation to and from the job site via plane, train or automobile. This includes any transportation costs accrued for travel between the airport or train station and your hotel.
  • Roll up your sleeves and make a big impact. If you are only tagging along or if your duties are minimal, you are not going to be able to make a claim on your tax return. According to the IRS, your charity work must be “real and substantial throughout the trip.” In other words, don’t dillydally!

Now that you know what to do to, let’s take a look at what not to do – or rather, what is not tax deductible.

  • Travel expenses for tagalongs are not deductible. Meaning, only the expenses for the individual(s) volunteering their services can be written off at tax time. For example, if you decided to take your children along on the trip but they will not be logging volunteer hours, you cannot deduct their portion of the travel expenses.
  • Your time and services are valuable, but you can’t deduct the value of your time and services. This is particularly true for those who are donating professional services, including medical, financial and legal. You also can’t deduct the income you may have lost while you were working as an unpaid volunteer for a qualified charity.
  • You cannot package work and play into a single deductible expense. That’s not to say that you can’t enjoy yourself or go out to the beach after a long day of building schools in a third-world country; but if a significant part of your trip is reserved solely for recreational purposes or a vacation, your claim will be denied.

For more information about potential summertime tax savings, email Rea & Associates. You may be surprised by how much you can save when you’re on a mission to do work for those in need!

By Maribeth Wright, CPA (Cambridge office)

Check out these articles for more summertime tax strategies:

School’s Out For Summer, But Tax Credits Are Still In

The Do’s And Don’ts Of Summertime Tax Prep

How To Become A Millionaire

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Protect Yourself From Fake Charity Scams

Wednesday, April 20th, 2016

Questions to Ask Yourself Before Making A Donation

Charity Scams - Ohio CP A Firm

Would you be able to spot the charity scam? Even if you are 99 percent certain the check you are about to write will go to a well-respected nonprofit organization, it makes since to ask yourself a few questions. Read on to find out which ones.

From identity theft and tax fraud to criminals finding ways to hack into your company’s network, we are learning every day that it’s simply not safe to let your guard down – for anyone or anything. Unfortunately, that mindset should apply when you are considering gifting a charitable donation as well.

Some fraudsters, in an attempt to prey on the generosity of strangers, have begun to solicit funds for fake charities particularly during and immediately after tax season. But you can shut down these scams by asking yourself these critical questions.

Read also: Join The Fight Against Identity Theft & Income Tax Fraud

Is this the charity I know and love or is it a spin off?

We are a sucker for the brands we know and love, and criminals will invoke similar names, attributes, branding to trip you up and get you to write that check. Even if you are 99 percent certain the check you are about to write will go to a well-respected nonprofit organization, it makes since to conduct a quick search online to remove all doubt. Two resources to consider are:

  • The Exempt Organization Select Check Tool – this search tool is designed to help you determine the legitimacy of the not-for-profit in question by providing users with information about the organization’s federal tax status and filings.
  • Guidestar – this online resource is great for users who want to find out about the validity of tax-exempt organizations as well as other faith-based nonprofits, community foundations and other groups that are typically not required to register with the IRS.

Do nonprofit organizations ask for personal information?

Don’t make it easy for a fraudster to steal your identity by willingly providing them with your Social Security Number. Legitimate nonprofit organizations will never need your SSN to complete a transaction and they should never need to retain any of your personal information for their records – this includes passwords.

Should my donation be in the form of a check or is it OK to give cash?

Yes! For your own security, and tax purposes, be sure to establish a paper trail. The best way to do this is to avoid making any type of cash donations. Instead, every time you give money to a charity, consider using a check or credit card to establish proof of the transaction. Not only is it important to establish a paper trail as a safety measure, it will help you when to go to claim the contribution on next year’s tax return.

I’m still not sure if it’s a valid nonprofit organization?

If the questions above don’t provide you with the reassurance you need, reach out to a trusted advisor who can help you identify whether a particular charitable organization is reputable or not while giving you pointers to help you protect your hard-earned dollars as well as your identity.

 By Maribeth Wright, CPA (Cambridge office)

Check out these articles to learn to learn about other fraud scenarios taxpayers should know about.

Stop Criminals From Hijacking Your Identity With These Top 5 ID Theft Prevention Posts

Then & Now: Data Security In America Since The Target Breach

Malware Threat Spreads To Smart Phones

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Study: Nonprofit Organizations Lack Governance Structure, Processes

Tuesday, May 19th, 2015
Directors of Nonprofit Organizations Lack Governance Structure - Rea & Associates - Ohio CPA Firm

Enacting proper policies throughout the organization will not only help rectify problems that stem from a weak system of governance, they will help solidify the connection between the directors and their organization while putting a solid structure in place for streamlining the nonprofit’s central objectives, such as fundraising, budgeting and lobbying.

If you had to guess, how strong do you think your nonprofit organization’s policies are? If you’re unsure or have that gut feeling they’re not strong, you’re certainly not alone. After surveying more than 900 directors of nonprofit organizations, the Stanford Graduate School of Business, in collaboration with BoardSource and GuideStar, reported some concerning findings in their 2015 Survey on Board of Directors of Nonprofit Organizations.

You may know that it’s important to have good governance when it comes to ensuring the stability and strength of your organization. Without having the right procedures in place to help govern the board of directors and the institution as a whole, the entire organization risks collapse.

While securing sources of revenue and recruiting new members are critical elements of every nonprofit, the real backbone of your organization is your board’s governance. Without the proper structure in place to help shape and reinforce your vision, mission and objectives, your board will not have the tools needed to lead – making your funding and membership objectives less effective.

According to Stanford Graduate School’s survey:

“Over two thirds (69 percent) of nonprofit directors say their organization has faced one or more serious governance-related problems in the past 10 years. Forty percent say they have been unable to meet fundraising targets. Twenty-nine percent have experienced serious financial difficulty. A quarter (23 percent) have asked their executive director to leave or had to respond to unexpected resignation [and] sixteen percent say they have had extreme difficulty attracting qualified new board members.”

Furthermore, the study found that:

  • Too many directors lack a deep understanding of the organization
  • Most lack formal governance structure and processes
  • Many directors are not engaged, do not understand their obligations

While the shortcomings underscored by this report highlight a widespread problem throughout the nonprofit industry, the solution may be as simple as writing (or reevaluating) and implementing a variety of key policies. Enacting proper policies throughout the organization will not only help rectify problems that stem from a weak system of governance, they will help solidify the connection between the directors and their organization while putting a solid structure in place for streamlining the nonprofit’s central objectives, such as fundraising, budgeting and lobbying. Policies can, and should, be in place to help manage the organization’s advisory council, board member orientation, ethics, confidentiality, donor relations, performance, and sponsorship activity – among many others.

Not sure what policies you should have in place? Take a look at this comprehensive Not-for-Profit Policy Checklist. Here are also a few examples of sample policies to give you greater insight into what you should be striving to accomplish.

By Mark Van Benschoten, CPA (Dublin office)

 

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Is It A Charity Or A Scam?

Tuesday, February 3rd, 2015

Remember when writing a check to a charity left you with a feeling of satisfaction and accomplishment? Unfortunately that feeling has been replaced with vulnerability and uncertainty as soliciting for fake charities has become a common way for scammers to prey on the generosity of strangers.

Remember when writing a check to a charity left you with a feeling of satisfaction and accomplishment? Unfortunately that feeling has been replaced with vulnerability and uncertainty as soliciting for fake charities has become a common way for scammers to prey on the generosity of strangers. Before you tear that check from your checkbook, take another look at the “Pay to the Order Of” line. That person who just spent the last 15 minutes explaining why your donation is critical to their organization might have less-than-admirable intentions.

Every year the Internal Revenue Service (IRS) warns taxpayers about what it considers to be the “Dirty Dozen” of tax scams. The annual report identifies schemes that appear to be more prevalent during filing season. And while you may be inclined to use some of your refund to help a worthwhile charity, the IRS reminds taxpayers to remain vigilant against scammers “masquerading as a charitable organization to attract donations from unsuspecting contributors” – particularly this time of year when scammers appear to be more active.

If you are approached by somebody who claims to be soliciting money for charity, here are a few tips to ensure that your money will be used for a worthwhile cause.

What’s In A Name?

Sometimes fake charities will adopt a name that’s similar to one you are sure to recognize and consider to be a respected organization within your community or nationwide. Even if you are confident that the not-for-profit you are about to donate to is reputable, a quick online search can remove any doubt. The IRS provides access to a search tool designed to help the public identify valid charitable organizations. You can also find registered 501(c)(3) organizations on Guidestar, an online tool that provides users with data and information about tax-exempt organizations and other faith-based nonprofits, community foundations and other groups typically not required to register with the IRS.

Keep Personal Information Private

Nonprofit organizations do not need your Social Security Number to complete the transaction, nor do they need to retain it for their files. So if someone claims to represent a charity and asks for any of your personal information (including passwords) – don’t give it to them! Scammers use this information to steal their victim’s identity. Protect yourself from fraud and remember to keep your personal information private.

Where’s The Proof?

When you make a decision to donate to a tax-exempt organization, make sure to have proof of the transaction. For your own security – and for tax record purposes – you should never make a cash donation. Use a check or credit card every time you give money to charity. Doing so not only proves that you made the donation; it will help you claim the contribution on next year’s tax return.

Ask An Expert

A trusted advisor can help you identify whether a particular charitable organization is reputable or not and can help you make the most of your donated dollars. Email Rea & Associates for more information.

By Maribeth Wright, CPA (Cambridge office)

 

Related Articles:

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When Scammers Demand That You Pay Up, IRS Says You Should Hang Up

Theft Safeguards To Cause Tax Return Delays In Ohio

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