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Archive for January, 2021

How to check if your Charity Donation is Tax Deductible

Monday, January 25th, 2021

Before making a charity donation you want to first verify that the charity is legit. There are a number of scams out there where fraudsters are setting up fake charities in order to steal money from people who donate to them. The second thing you want to do is make sure the charity you are donating to qualifies as a tax deductible donation. The IRS has setup a tool where you can verify if your charity is tax deductible:

https://www.irs.gov/charities-non-profits/tax-exempt-organization-search

Please consult your tax advisor on all the above information.

Who Qualifies for the Employee Business Deduction

Wednesday, January 13th, 2021

Unlike in years past, taxpayers can no longer claim unreimbursed employee expenses as a miscellaneous deduction on their Schedule A unless certain qualifications are met. If you are a qualified employee or an eligible educator expenses can be deducted as an adjustment to income on Form 2106. A qualified employee is one of the following:

• Armed Forces Reservists
• Qualified performing artists
• Fee-basis state or local government officials
• Employees with impairment-related work expenses

A qualified expense is:
• Paid or billed during the tax year
• For carrying on a trade or business of being an employee, and
• Ordinary and necessary

Publication 529 gives a more in depth look at what is and isn’t deductible:
https://www.irs.gov/pub/irs-pdf/p529.pdf

Please consult your tax advisor on all the above information.

2020 Standard Mileage Rates

Thursday, January 7th, 2021

As we get closer to the end of 2020 you may want to know how much you can deduct for your business mileage for this year. The 2020 standard mileage rates are the following:

• 57.5 cents per mile driven for business use, down one half of a cent from the rate for 2019,
• 17 cents per mile driven for medical or moving purposes, down three cents from the rate for 2019, and
• 14 cents per mile driven in service of charitable organizations.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station.

Please consult your tax advisor on all the above information.