St. George Consulting Inc. Phone: 310-329-1963
Fax: 310-329-1973
    
         
    

THINGS YOU NEED TO KNOW!
Helpful Websites
Cost and Accuracy
Audit Considerations
Copying Tax Procedures
Sales Tax Deductibility
Extension Considerations
Tsunami Relief Contribution
Checklist of Tax Documents
Collecting Needed Information
Contact Us

Sales Taxes Deductibility as
Itemized Deductions

We have a new ALTERNATIVE itemized deduction for 2004, for state and local sales INSTEAD of the traditional state and local income tax.

 

In processing your 2004 tax we will evaluate which alternative will yield more itemized deduction (which will most likely reduce your taxes).

 

In General:
    1.  This is a new deduction only to residence of states without income  
        tax (The lucky 8 states!)

 

  1. There are two options to determine how much you can consider for  sales taxes in computing your allowed itemized deductions.
    1. Tables provided by the IRS based on the number of exemptions and adjusted gross income (See IRS publication 600) taxes on certain purchases are added to the tables allowed amounts (autos, boats, etc).
    2. Actual taxes paid (documented by related receipts).
  1. This new alternative requires close watch and planning for future years.

Presently this option is limited to years 2004 and 2005

Noncash Contribution to Charity

(VA, Goodwill…..)

 


Often we get the question “How much I can claim as Noncash Contribution without ‘really’ sitting down and going through the ‘brain damage’?”.

 

The answer is the calculation is a must, but not the brain damage.

 

If you find yourself in this situation, please call our office. We have a spreadsheet template that we can e-mail you where you can do your calculations and e-mail them back to us with the least effort.

 

General Rules

 

  1. If the amount of your noncash contribution for 2004 is $500 or less you do not need to e-mail us your calculation – just e-mail us the amount you want to claim.
  2. If you are claiming over $500 but less than $5000 we must have your calculation to prepare the required Form 8283, which must be attached with your tax return before it can be filled.
  3. For donations of over $5000, you must obtain an appraisal with more restrictive rules – we will be glad to e-mail you the instructions.

 

IRS instructions require the information in this worksheet so they can evaluate if the value claimed is in-line with their rules and regulations.

 

· Out-of-pocket expenses for volunteer work for charities are considered cash contributions.

· Most likely the amount that may be claimed as a non-cash contribution is between 10%-20% of your basis (amount you paid/value when transferred to you), which reflects substantial depreciation.

· Other personal assets that have appreciated may also be contributed to charities. You are allowed the appreciated value rather than your original cost, so these assets yield much higher benefits. A good example of this is publicly traded stock at work, etc.

 

If you are in doubt please e-mail us your concerns, we will be glad to clarify and advise.

 


Alternatives for paying your taxes

 


More and more the IRS is trying to act as a real business, very serious about collecting their share.

 

What to do if your tax return shows balance due and you are short on funds?

 

  1. In all cases you must file timely or file an extension timely.
  2. Balance owed may be paid in various ways:
    1. File an installment agreement with your taxes, which commits you to specific payment plan. You still will be charged interest and some penalties until the full balance is paid.
    2. Use your credit card to make partial or full payment.
    3. Use the (EFTPS) system, which stands for (Electronic Federal Tax Payment System).
    4. Electronic funds withdrawal: you authorize the IRS to access your bank on certain date and for specific amount.

 

The IRS official website states that for 2003:

 

1. More than 1.75 million people paid their federal taxes by electronic funds withdrawals and credit cards.

2. More than 950, 000 taxpayers paid by credit card.

3. More than 800,000 taxpayers paid their taxes through (EFW) electronic fund withdrawals

 

For credit card payments contact

· Official Payments Corporation, 1-800 2PAY-TAX (1-800-272-9829), 1-877-754-4413 (Customer Service) (www.officialpayments.com). And

· Link2Gov Corporation, 1-888-PAY – 1040 (1-888-729-1040), 1-888-658-5465 (Customer Service) (www.PAY1040.com)

 
    
     St. George Consulting Inc. 18051 Crenshaw Blvd. Suite D Torrance, CA. 90504