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A Tax Savings Guide to the Holidays: Charitable Contributions

Get into the holiday spirit with gifts to charities and you could be gifting yourself a tax deduction

These days the holidays tend to involve lots of buying stuff, partying, and hectic travel. Don’t get me wrong, these activities can all net you some pretty valuable tax deductions as long as they’re done according to IRS rules.

But you can also get a tax deduction by getting into the more traditional spirit of the season, the spirit of giving.

Not only does giving to charity fit in well with the spirit of the holidays, but December also conveniently falls at the end of the year. That means that you can pretty accurately look ahead to tax season and plan your charitable giving (and by extension your deductions) so that you get the biggest possible tax benefit. You may even be able to give enough to charity so that you get bumped to a lower tax bracket.

But in order to get a deduction you have to make your donations to a group recognized by the IRS as a charitable organization. These groups must be nonprofits of a religious, charitable, educational, scientific, or literary nature or they must be involved in preventing cruelty to animals or children. Continue reading “A Tax Savings Guide to the Holidays: Charitable Contributions”

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A Tax Savings Guide to the Holidays: Tax Deductible Business Party

You can save tax money by throwing a holiday party – but make sure it’s business-related

In parts one and two of our guide to saving on taxes during the holidays, we talked about scheduling a business meeting on the way to visit relatives and deducting part of your travel expenses as well as putting a tax deductible gift to yourself under the tree.

Another great idea for saving tax money during the holidays is to throw a tax deductible holiday party for your employees or customers.

Not only is throwing a party a great way to get into the holiday spirit, it can boost employee morale and make your customers/clients happy.

But it’s not all fun and games. Your party must be directly related to your business in order for you to deduct it. Essentially what this means is you can’t go too crazy. The IRS will disallow anything it considers lavish or extravagant as well as anything that isn’t directly related to your business. Continue reading “A Tax Savings Guide to the Holidays: Tax Deductible Business Party”

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What Are Taxpayer Advocates and When Should You Call Them?

Taxpayer advocates can help you resolve problems with the IRS, especially if they are causing you financial hardship

If you’ve ever had a tax problem, someone may have suggested that you contact a taxpayer advocate. But who are these taxpayer advocates and what exactly do they do?

The Taxpayer Advocate Service (TAS) is an independent organization inside the IRS. They serve as your voice inside the sometimes opaque IRS. They’re free, so you have nothing to lose in contacting them. Oftentimes with tax issues, the worst thing you can do is nothing at all.

When you should contact the TAS?

When should you contact the Taxpayer Advocate Service?

  • If you are experiencing economic hardship, for example if you are unable to afford basic necessities like housing, transportation, and food.
  • If you are unable to resolve a problem with the IRS by speaking to a normal representative (1-800-829-1040).
  • If you believe there’s a problem with an IRS system or procedure that needs to be corrected or improved. Continue reading “What Are Taxpayer Advocates and When Should You Call Them?”