Tag Archives: IRS

5 Tips for Mission Trip Tax Deductions

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Mission Trip, Charity Travel, Volunteer, Tax Deductions, Ramsey & Associates, CPA Firm, Mahtomedi, MNSummer is a great time to sign up for mission trips and serve the less fortunate across the world. Whether your destination is Haiti or Honduras, the travel and work-related expenses you incur may be deductible on next year’s tax return.

Check out these IRS guidelines to see if your trip qualifies for major deductions.

1. Qualified Charities

While churches and governmental organizations are qualified, other nonprofits must apply to the IRS. Ask the group about its IRS status before you sign up or use the Select Check tool on IRS.gov to check the organization’s status.

2. Out-of-Pocket Expenses

Throughout your trip, necessary out-of-pocket expenses you encounter may be deductible. Qualifying costs must be unreimbursed by your organization and directly connected with your work. Personal, living and family expenses do not qualify as deductible costs.

3. Genuine and Substantial Duty.

Relaxing vacations do not qualify for tax deductions. On average, the IRS recommends at least six hours of volunteer work per tax-deductible work day. Travel days are also typically considered work days. Days off and sightseeing days are totally fine-just be aware that related expenses are not tax deductible.

4. Value of Time and Service

Taking a couple weeks off work to go on your church’s mission trip? You can’t deduct the value of services you give to charity. This includes income lost while you work as an unpaid volunteer for a qualified charity.

5. Deductible Travel

Deductible traveling expenses often include transportation by air rail, bus, taxi or rental car. Costs of lodging and meals also usually qualify for deductions.

Paying for someone else to go on a mission trip this summer? While many of us have received letters from relatives and friends asking for support, contributions are only tax deductible if they are designated for the entire group. From a tax perspective, the best way for a mission trip to fundraise is by working toward one collective financial goal.

Want to learn more about charity travel and mission trip tax deductions? Contact Ramsay & Associates today. Safe and happy travels!

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Waiting on Tax Renewals – In Santa’s Bag?

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Irs Federal Income Tax Forms 1040 And Schedule DAs the end of the year approaches, we’re seeing the usual jockeying by Congress to clear their calendar of easy items before they all head home for the holiday break, and come back to a lame duck Congress and a President with nothing to lose. In all of this, the one thing missing so far is a tax extension bill.

The House and Senate had reached a compromise a few weeks back to extend the expired tax breaks in the short run, but that bill was threatened with veto by the President who thought it favored businesses and the wealthy over middle and low income Americans. The President also wanted extensions on the middle and low income tax breaks to run through 2018, an apparent attempt to keep a future Republican President and Congress from undoing what he’s done. This bill is dead.

Now, there is another bill coming out of the Republican controlled House to simply extend all of the expired items for the 2014 tax year, but Senate Majority Leader Harry Reid has indicated that it might not come up in the Senate, as they need to pass both a bill to fund the Federal government and a military funding bill before they can get to the tax extenders.

Either way, this will be yet another year that doesn’t see the tax code actually resolved until well after the end of the year, meaning confusion for taxpayers. Stay tuned.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

2015 IRS Updates – Part 1

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Irs Federal Income Tax Forms 1040 And Schedule DWith the mid-term elections behind us and the end of the year approaching, the IRS is working to gear up for the upcoming tax season. As part of this process, they’ve released several updates for limitations, write-offs and expected filing dates. We expect to see more as the end of the year gets closer, but here are a few of the highlights so far. This will be one of at least two posts on the subject.

  • Standard Deduction:
    • $12,600 Married Filing Jointly (MFJ)
    • $6,300 Single
    • $9,250 Head of Household (HOH)
    • $6,200 Married Filing Separately (MFS)
  • Roth IRA Phaseouts – income at which ability to use a Roth IRA is reduced or eliminated:
    • $183,000 to $193,000 MFJ
    • $116,000 to $131,000 HOH
    • $0 and $10,000 MFS
  • Section 179 expensing (unless renewed by congress)
    • $25,000 of deduction for equipment placed in service in 2014
    • Dollar for dollar phaseout of deduction starts at $200,000 of equipment purchases, if purchases are over $225,000, no deduction is allowed

More to come as we near the end of the year.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.

Getting Your House In Order

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In a recent Money Magazine article, a survey revealed that 61% of adults with children don’t have even a basic will in place. Many don’t want to think about death, and some believe that wills are only for people that are elderly or “rich”.

In reality, visiting an attorney and discussing your situation is money well spent.  Even if you don’t think you need one, you might.  Do you own your home? Do you have things that you want a specific person to have when you pass away? Do you have investments outside your retirement accounts, or want to use your money to provide for future generations? If your answer to any of these is “yes”, it would be wise to seek out an attorney who works with estate planning.

The American Bar Association (ABA) has a great FAQ section on estate planning, which can give you some additional items to consider, and can be found here. Should you decide contacting an attorney is right for you, ask your family and friends who they’ve used, reach out to other professionals like your CPA, or use the ABA’s website to find an attorney near you.

About the author

Brady is the owner of Ramsay & Associates. He specializes in financial statement preparation and personal, fiduciary and corporate tax and accounting.

His professional experience includes seven years' experience for local and national CPA firms before joining Ramsay & Associates in 2006.

He has a Bachelor of Accounting degree from the University of Minnesota Duluth. He is a Certified Public Accountant, a member of the Minnesota Society of CPA's, an Eagle Scout, as well as an active volunteer in the community.