FF&F News & Events


Charitable Donations

How Do I? Gather the right paperwork for a charitable deduction

Taxpayers must generally provide documentation to support (or to “substantiate”) a claim for any contributions made to charity that they are planning to deduct from their income. Assuming that the contribution was made to a qualified organization, that the taxpayer has received either no benefit from the contribution or a benefit that was less than the value of the contribution, and that the taxpayer otherwise met the requirements for a qualified contribution, then taxpayers should worry next whether they have the proper records to prove their claim.

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American Opportunity Tax Credit

How do I . . . compute the American Opportunity Tax Credit?

The American Taxpayer Relief Act of 2012, signed into law on January 2, 2013, extended the American Opportunity Tax Credit through (and including) the 2017 tax year. The credit, which is an enhanced version of the Hope tax credit for tuition, allows taxpayers to claim a credit against federal income taxes for costs of tuition and other qualified educational expenses paid for the taxpayer, his or her spouse, or a dependent claimed on the tax return who is enrolled at an eligible educational institution.

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below market rate loan

How do I? Calculate imputed interest on below market rate loans

Loans without interest or at below market interest rates are re-characterized so that the lender must recognize market-rate interest income. Put another way, a below market rate loan is a loan for which a rate of interest that is lower than the applicable federal rate (AFR) (which is computed by the government and released by the IRS on a monthly bases).

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Small Business Health Insurance Credit

How do I? Compute the small business health insurance credit

Under the Patient Protection and Affordable Care Act (PPACA), small employers can claim a credit for providing health insurance for employees and their families. Health insurance includes not only basic medical and hospital care, but dental or vision, long-term care, and coverage for specific diseases or illness.

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Proof of filing tax return

How do I: prove timely filing of my income tax return?

A return or a payment that is mailed to the IRS is timely filed or paid if it is delivered on or before its due date. A return with a U.S. postmark, which is delivered after its due date, is timely filed if the date of the postmark is no later than the due date, the return was properly addressed, and the return had proper postage.

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Calculations

How do I….calculate the reinstated Pease itemized deductions limitation under ATRA?

The limitation on itemized deductions (also known as the Pease limitation after the member of Congress who sponsored the original legislation) is reinstated by the American Taxpayer Relief Act (ATRA) for tax years beginning after December 31, 2012. The reinstated Pease limitation is intended to reduce or eliminate the itemized deductions of higher income taxpayers to raise revenue.

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