Posted on December 1, 2010May 31, 2016 by Jan Roberg

Last Minute Tax Tips: Missouri Food Pantry Credit

UPDATED FOR 2013

Did you know that if you donate money to a local food pantry in Missouri, you may be eligible for a Food Tax Credit worth 50% of what you donate? Let’s say for example that you gave $500 to your local food pantry. You would get a receipt (or have the food pantry sign a special form) and then you’d use that to take $250 off of your Missouri state tax liability. But that’s not all! It’s a charitable donation so if you file a Schedule A to itemize your deductions, you’d reduce your federal taxable income by $500. So if you’re in the 25% tax bracket, that would be another $125 you’d get back on your taxes. That’s like paying $125 to have $500 worth of value.

But it’s even better than that. I read on one of the food pantry websites that for every $1 of cash donated to the pantry, $20 worth of food is generated for the hungry. It’s a gift that just multiplies.

You can’t claim a credit for over $2,500 (that would be a $5,000 donation.) The credit is non-refndable, that means you can’t get a credit for more than the amount of your tax liability. Remember, since you’re getting a tax credit for the donation, you don’t get to claim the donation as a deduction on your Missouri return-it’s an adjustment you’ll have to make on the return.

The state of Missouri has only allocated $2,000,000 for the tax credit. What happens is that all the credits are held until April 15th before they are allocated. If there are over $2,000,000 of credits applied for, they will be allocated among the applicants. In that situation, the credits that you weren’t able to use can be carried forward to next year.

This is one of the those few tax credits that normal, everyday kind of folks can use. There’s no dollar minimums but I recommend donating at least $100 to make it payoff. Most tax companies charge an extra fee for preparing Missouri Tax Credits. It doesn’t make sense to claim a credit for less than the amount of the charge to prepare the form.

For more information about the Food Pantry Tax credit, click here to go to the Missouri Department of Revenue web site: http://dor.mo.gov/taxcredit/fpt.php

The food pantry shelves are low and the need is at an all time high. Even if you don’t want or need a Missouri tax credit, this is a charity that’s worthy of your support.

Posted on September 23, 2010May 31, 2016 by Jan Roberg

Last Chance to Save Your Charity

The IRS has asked EAs and other tax professionals to post this widget on our websites. If you know about a charity that might be in danger of losing its not for profit status, please click on this link to get help. Many of these organizations can resolve their issues for no cost and it only takes a few minutes. The deadline is October 15th. Thanks.

Posted on August 19, 2010August 8, 2017 by Jan Roberg

Urgent News for Nonprofit Organizations

The IRS will be revoking not for profit status on several nonprofit organizations that have failed to file information returns for the past three years. As of July 2010, it appears that more than 355,000 nonprofits were facing revocation. If you are involved with a nonprofit organization, you need to make sure that your organization is safe.

What happened? For decades, once an organization received a determination from the IRS that it was tax exempt, that status was final, unless specifically revoked by the IRS. Although many nonprofits do file information returns every year, small organizations with receipts of less than $25,000 were exempt. This changed with the Pension Protection Act of 2006. The PPA had a lot of provisions about taxes, but the relevant one here was that it required almost all exempt organizations to file information returns with the IRS every year starting in 2008. If an organization didn’t file for three years, then the IRS is required to revoke the tax exempt status.

If your organization loses its tax exempt status, then it will be required to pay income taxes. If it’s a charity, it will no longer be able to accept tax-deductible contributions. Revocation is serious business.

The deadline for filing was May 17th, which has already passed. Fortunately, the IRS is offering one time relief for filers of form 990N (the e-Postcard) for nonprofits with receipts of less than $25,000. And also for filers of 990EZ for organizations with receipts of less than $1,000,000 but more than $25,000. The new deadline is Octobr 15, 2010.

What can you do? First, check to see if your organization is on the IRS revocation list. Click on the link to the IRS website, scroll down to find your state and open the file. The organizations are listed alphabetically. http://www.irs.gov/charities/article/0,,id=225889,00.html

If you’re on the list, then you’ll need to determine what type of filer you are and then you can go from there. Do not let your organization be a victim of “Oops, I didn’t know.” Call me, I can help.

Posted on August 16, 2010August 8, 2017 by Jan Roberg

Back to School Time

Whho’s

In my neighborhood it’s back to school week! Here’s some tax tips related to sending the kids back to school.

It seems like if they start school on Monday, then the gift wrap/candy sale starts on Tuesday. If you have a choice, you’re better off writing a check directly to the PTO for whatever donation you’d like to make to the school rather than buying whatever the kids are selling. For one thing, the school will get all of your donation instead of the money going to some fundraiser sales company. For another, your check to the PTO will be 100% tax deductible. (I would argue that 50% of whatever you pay for the gift wrap should be counted as tax deductible as well, but the fund raising companies will argue that their gift wrap really is worth $7 per roll so it’s an iffy deduction.)

If you’re a school volunteer, the money you spend for the classroom counts as a charitable contribution. For example, let’s say you’re the “Halloween Party Mom.” You spend $30 on candy, $20 on art supplies, and $15 on face paint. Save those receipts because that’s a $65 contribution to the school. The same goes for scouts and church groups. Hold on to those receipts for those projects as well.

Now if the kids pay an activity fee and you’re using the kids’ activity money to buy supplies, then you can’t deduct those receipts. But if you’re spending your own money on projects, then you definitely can use that as a deduction. Scout leaders–your uniform is deductible, your kids uniform isn’t.

Remember that the mileage you put on your car for volunteering is also deductible with your contributions. Charity miles are counted as 14 cents per mile. It doesn’t seem like much, but for some people it really adds up.

Welcome back and have a great year!