Tax Deductions for Assisted Living Costs
If you or a family member lives in an assisted living facility, you know that assisted living costs continue to rise every year. But did you know some of those costs may be tax deductible? Medical expenses, including some long-term care expenses, are deductible if the expenses are more than 7.5 percent of your adjusted gross…
Contributions for Short-Term Mission Trips
It is a common practice for churches to raise funds to send volunteers on short-term mission trips. The funds are often raised by a participant preferenced for his or her own trip expenses, as opposed to raising the funds for the group of volunteers as a whole. Tax-deductible contributions for short-term missionary trips must be made “to or for…
New Changes to the Employee Business Expense Deduction
Prior to the Tax Cuts and Jobs Act, which went into effect, January 1, 2018, unreimbursed ministry-related expenses were generally deductible on the minister’s individual tax return as a miscellaneous itemized deduction (Schedule A) if they exceeded 2% of an individual’s AGI. Starting in 2018, these deductions will be eliminated for tax years through 2025. This includes unreimbursed…
Court Rulings Regarding Charitable Contributions—
Tax Court Denies Deduction for a Member’s Contributions to His Church A tax court denied a church member’s charitable contribution deductions to his church for lack of substantial information. The church member claimed that his bank savings account register was proof that he made charitable contributions because it showed these withdrawals. The court denied these…
How to Write a Church Donor Acknowledgement Letter
The IRS sets out that acknowledgments must be provided “in writing, at the time of solicitation or when the payment is received, and in a way that will come to the attention of the donor,” according to IRS Publication 1771. For the letter to be considered “contemporaneous” with the contribution, “a donor must receive the acknowledgment by…
How to Value Noncash Charitable Contributions
If you donate property to a nonprofit such as clothing, electronics, books, or furniture, you need to determine how much it is worth when you donate it. The basic rule is that you may deduct no more than the property’s “fair market value” at the time of the donation. But fair market value can be…
Is Volunteer Work Still Tax Deductible?
The IRS will not allow individuals to deduct the monetary value of their volunteer service to a nonprofit on their individual income tax returns. But volunteers may be able to deduct for certain volunteer expenses. Your donation will be deductible only if it is made to a qualified nonprofit, tax-exempt organization. That is, the IRS must have granted 501(c)(3) tax-exempt…
How to Deduct Ministry Mileage in 2017
With the mileage deduction, the IRS only lets you deduct trips that are ministry-related. The natural question is: what types of trips are considered ministry mileage? Here are a few examples of approved mileage by the IRS: Travel between churches You can take the mileage deduction for travel from church A to church B. Errands/supplies Driving…
Are Home Equity Loans Still Deductible Under New Law
The new federal tax law created a lot of confusion over whether taxpayers were still able to deduct the interest they pay on their home equity loans and home equity lines of credit. If you’re planning to redo a bathroom or a kitchen or fix up a fixer-upper, the interest on new home equity loans,…
Giving Strategies to Charity Under New Tax Law
Changes to the tax law in 2018 have taken away most people’s ability to deduct charitable contributions. But there are still a few options to consider in order to give and still receive. Fortunately, there are options for donors who would like to obtain a tax benefit for their generosity. One permits anyone 70½ or…
