Tips to Keep in Mind for Taxpayers Traveling for Charity

During the summer, some taxpayers may travel because of their involvement with a qualified charity. These traveling taxpayers may be able to lower their taxes.

Here are some tax tips for taxpayers to use when deducting charity-related travel expenses:

  • Qualified Charities.  For a taxpayer to deduct costs, they must volunteer for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are generally qualified, and do not need to apply to the IRS. A taxpayer should ask the group about its status before they donate. Taxpayers can also use the Select Check tool on IRS.gov to check a group’s status.
  • Out-of-Pocket Expenses.  A taxpayer may be able to deduct some of their costs including travel. These out-of-pocket expenses must be necessary while the taxpayer is away from home. All costs must be:
    • Unreimbursed,
    • Directly connected with the services,
    • Expenses the taxpayer had only because of the services the taxpayer gave, and
    • Not personal, living or family expenses.
  • Genuine and Substantial Duty.  The charity work the taxpayer is involved with has to be real and substantial throughout the trip. The taxpayer can’t deduct expenses if they only have nominal duties or do not have any duties for significant parts of the trip.
  • Value of Time or Service.  A taxpayer can’t deduct the value of their time or services that they give to charity. This includes income lost while the taxpayer serves as an unpaid volunteer for a qualified charity.
  • Travel Expenses a Taxpayer Can Deduct.  The types of expenses a taxpayer may be able to deduct include:
    • Air, rail and bus transportation,
    • Car expenses,
    • Lodging costs,
    • Cost of meals, and
    • Taxi or other transportation costs between the airport or station and their hotel.
  • Travel Expenses a Taxpayer Can’t Deduct. Some types of travel do not qualify for a tax deduction. For example, a taxpayer can’t deduct their costs if a significant part of the trip involves recreation or vacation.

For more on these rules, see Publication 526, Charitable Contributions. Get it on IRS.gov/forms at any time.

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How to Get Tax Transcripts and Copies of Tax Returns from the IRS

Taxpayers should keep copies of their tax returns for at least three years. Those who need a copy of their tax return should check with their software provider or tax preparer. Prior year tax returns are available from IRS for a fee.

For those that need tax transcripts, however, IRS can help. Transcripts are free.

Tax Transcripts

A transcript summarizes return information and includes Adjusted Gross Income (AGI). They are available for the most current tax year after the IRS has processed the return. People can also get them for the past three years.

When applying for home mortgages or college financial aid, transcripts are often necessary. Mortgage companies, however, normally arrange to get one for a homeowner or potential homeowner. For people applying for college financial aid, see IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications on IRS.gov for the latest options.

Taxpayers can get two types of transcripts from the IRS:

  • Tax Return Transcript.  A tax return transcript shows most line items including AGI from an original tax return (Form 1040, 1040A or 1040EZ) as filed, along with any forms and schedules. It doesn’t show changes made after the filing of the original return. This transcript is only available for the current tax year and returns processed during the prior three years. A tax return transcript usually meets the needs of lending institutions offering mortgages and student loans.
  • Tax Account Transcript.  A tax account transcript shows basic data such as return type, marital status, adjusted gross income, taxable income and all payment types. It also shows changes made after the filing of the original return.

To get a transcript, people can:

  • Order online. Use the ‘Get Transcript’ tool available on IRS.gov. There is a link to it under the red TOOLS bar on the front page. Those who use it must authenticate their identity using the Secure Access process.
  • Order by phone. The number to call is 800-908-9946.
  • Order by mail.  Complete and send either Form 4506-T or Form 4506T-EZ to the IRS to get one by mail. Use Form 4506-T to request other tax records: tax account transcript, record of account, wage and income and verification of non-filing. These forms are available on the Forms & Pubs page on IRS.gov

Those who need an actual copy of a tax return can get one for the current tax year and as far back as six years. The fee per copy is $50. Complete and mail Form 4506 to request a copy of a tax return. Mail the request to the appropriate IRS office listed on the form. People who live in a federally declared disaster area can get a free copy. More disaster relief information is available on IRS.gov.

Plan ahead. Delivery times for online and phone orders typically take five to 10 days from the time the IRS receives the request. You should allow 30 days to receive a transcript ordered by mail and 75 days for copies of your tax return.

Tips on How to Handle an IRS Letter or Notice

The IRS mails millions of letters every year to taxpayers for a variety of reasons. Keep the following suggestions in mind on how to best handle a letter or notice from the IRS:

  1. Do not panic. Simply responding will take care of most IRS letters and notices.
  2. Do not ignore the letter. Most IRS notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. Read the letter carefully; some notices or letters require a response by a specific date.
  3. Respond timely. A notice may likely be about changes to a taxpayer’s account, taxes owed or a payment request. Sometimes a notice may ask for more information about a specific issue or item on a tax return. A timely response could minimize additional interest and penalty charges.
  4. If a notice indicates a changed or corrected tax return, review the information and compare it with your original return. If the taxpayer agrees, they should note the corrections on their copy of the tax return for their records. There is usually no need to reply to a notice unless specifically instructed to do so, or to make a payment.
  5. Taxpayers must respond to a notice they do not agree with. They should mail a letter explaining why they disagree to the address on the contact stub at the bottom of the notice. Include information and documents for the IRS to consider and allow at least 30 days for a response.
  6. There is no need to call the IRS or make an appointment at a taxpayer assistance center for most notices. If a call seems necessary, use the phone number in the upper right-hand corner of the notice. Be sure to have a copy of the related tax return and notice when calling.
  7. Always keep copies of any notices received with tax records.
  8.  The IRS and its authorized private collection agency will send letters and notices by mail. The IRS will not demand payment a certain way, such as prepaid debit or credit card. Taxpayers have several payment options for taxes owed.

National Ice Cream Day 2017

By Debby Winters

It is finally here! July 16, 2017!! Hip Hip Hooray! To help you celebrate National Ice Cream Day, here are a few tidbits about ice cream that you may not have already known

1- In 1984, President Ronald Reagan decreed that July would be National Ice Cream Month. And on the third Sunday of July—yes, that’s today—we celebrate National Ice Cream Day.

2- The sound of the ice cream truck is a trademarked sound: On May 21, 2013 the Australian company Breville received the trademark for the sound the ice cream truck makes, which they described as follows: The mark consists of the song “Turkey in the Straw”, which consists of a keyboard synthesizer playing pickup measure: G4 eighth note followed by F4 eighth note; first measure: E-flat4 quarter note followed by E-flat4 eighth note followed by F4 eighth note followed by E-flat4 eighth note followed by B-flat3 eighth note followed by G3 eighth note followed by B-flat3 eighth note, played simultaneously with E-flat3 half note followed by B-flat2 half note; second measure: E-flat 4 eighth note followed by C5 eighth note followed by B-flat4 eighth note followed by G4 eighth note followed by B-flat4 quarter note followed by E-flat4 eighth note followed by F4 eighth note, played simultaneously with E-flat3 half note followed by B-flat 2 half note; third measure: G4 quarter note followed by G4 quarter note followed by G4 eighth note followed by F4 eighth note followed by E-flat 4 eighth note followed by F4 eighth note, played simultaneously with E-flat3 half note followed by B-flat 2 half note; fourth measure: G4 quarter note followed by F4 quarter note followed by F4 quarter note followed by G4 eighth note followed by F4 eighth note, played simultaneously with B-flat2 half note followed by F3 half note; fifth measure: E-flat4 quarter note followed by E-flat4 eighth note followed by F4 eighth note followed by E-flat4 eighth note followed by B-flat3 eighth note followed G3 eighth note followed by B-flat3 eighth note, played simultaneously with E-flat3 half note followed by B-flat2 half note; sixth measure: E-flat4 eighth note followed by C5 eighth note followed by B-flat4 eighth note followed by G4 eighth note followed by B-flat4 quarter note followed by E-flat4 eighth note followed by F4 eighth note, played simultaneously with E-flat3 half note followed by B-flat2 half note; seventh measure: G4 eighth note followed by B-flat4 eighth note followed by eighth rest followed by C5 eighth note followed by B-flat4 eighth note followed by G4 eighth note followed by E-flat4 eighth note followed by F4 eighth note, played simultaneously with B-flat2 quarter note followed G3 quarter note followed by B-flat3 half note; eighth measure: G4 quarter note followed by F4 quarter note followed by E-flat4 quarter note followed by quarter rest, played simultaneously with B-flat2 half note followed by E-flat2 half note.

3- Around 1832, Augustus Jackson created multiple ice cream recipes and pioneering a superior ice cream preparation technique and decoration.

4- Nancy Johnson of Philadelphia created the hand-cranked device that was the first ice cream machine in 1843. This revolutionizing the distribution and sale of ice cream throughout the United States and Canada.   It was a manual device cranked by a handle with a pewter cylinder.  Her invention, as illustrated in her patent no. 3,254 looked like the diagram below and was described as: An outer wooden pail contained crushed ice; an inner tin or pewter cylinder contained the ice-cream mix to be frozen.  A manual device cranked by a handle with a lid bolted on and the handle inserted through the top of the lid and turned to freeze the mix. The device inside attached to the handle was called a dasher. It was possible to split the inner cylinder such that 2 different ice cream flavours could be frozen simultaneously but separately.

5- Syrian immigrant and waffle salesman Ernest Hamwi has generally been credited with inventing the first edible ice cream cone at the 1904 St. Louis World’s Fair when a nearby vendor ran out of serving dishes, and the creation sparked a nationwide sensation.

6- Philadelphian entrepreneur by the name of Robert Green would regularly mix syrup and cream into his carbonated beverages in the last decades of the 1800s. Legend has it that on one fateful day, he ran out of these regular ingredients and used ice cream as a substitute, creating the first ice cream soda in the process.

7- The Oregon Research Institute in Eugene and published a study in the American Journal of Clinical Nutrition that found that when the brain craves ice cream and other high-fat/high-sugar foods, it reacts in the same way as a cocaine user’s does in a period of withdrawal.

8- In 2012, after an exhaustive survey of regional credit card transactions throughout the nation, researchers found that “Long Beachers eat ice cream a whopping 268 percent more than the average American.” Fort Worth and Dallas also scored well above average when it comes to devouring ice cream.

9- Prior to the invention of refrigeration, ice cream was a rather expensive dessert. Our nation’s first president is rumored to have once spent $700 on the delicacy in New York City over the course of one summer. Sharing her husband’s zeal, Martha Washington acquired a “cream machine for ice” in 1784 to serve ice cream to her guests at Mount Vernon.

10- Ben And Jerry wanted to buy a bagel machine but could only afford an ice cream maker, thus was born their famous ice cream.

Go get yourself some ice cream! Happy National Ice Cream Day 2017!

One Month Left for Arkansas Nonprofits to Apply for SBA Disaster Loans

FROM THE SBA:

SACRAMENTO, Calif. – Director Tanya N. Garfield of the U.S. Small Business Administration’s Disaster Field Operations Center-West today reminded Arkansas private nonprofit organizations of the Aug. 14, 2017, deadline to apply for an SBA federal disaster loan for property damage caused by severe storms, tornadoes, straight-line winds and flooding that occurred April 26 – May 19, 2017. Private nonprofits that provide essential services of a governmental nature are eligible for assistance.

According to Garfield, eligible private nonprofits of any size may apply for SBA federal disaster loans of up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets. SBA can also lend additional funds to help with the cost of making improvements that protect, prevent or minimize the same type of disaster damage from occurring in the future.

In addition, SBA offers Economic Injury Disaster Loans to help eligible private nonprofits meet working capital needs caused by the disaster. Economic Injury Disaster Loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. Economic injury assistance is available regardless of whether the private nonprofit suffered any property damage. Private nonprofits have until March 15, 2018, to apply for an SBA Economic Injury Disaster Loan.

SBA low-interest federal disaster loans are available in Baxter, Benton, Boone, Carroll, Clay, Cleburne, Conway, Craighead, Cross, Faulkner, Independence, Izard, Jackson, Lawrence, Madison, Marion, Mississippi, Montgomery, Newton, Ouachita, Perry, Poinsett, Prairie, Randolph, Saline, Washington, White and Woodruff counties.

The interest rate is 2.5 percent with terms up to 30 years. Loan amounts and terms are set by SBA and based on each applicant’s financial condition.

Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance. Individuals who are deaf or hard of hearing may call (800) 877-8339. Completed applications should be mailed to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX  76155.

Devil Horns Gesture Trademarkable?

By Debby Winters

In the past few months, Gene Simmons, of the famed rock n roll band Kiss, has applied for a number of trademark applications.  Simmons, one of the most successful musician-entrepreneurs in history, owns a number of other trademark registrations through his Gene Simmons Company.  The most notable of his recent filings is for the hand gesture shown below. This application was filed June 9, 2017 claiming it was for live performances by a musical artist; personal appearances by a musical artist, which has first been used in 1974 .  Simmons claimed that it became a part of the band’s act during its Hotter Than Hell tour — on Nov. 14, 1974 to be exact.

Mark Image

At the time of the filing, it was controversial as to whether Simmons was the owner of the hand gesture, as it is not only an international symbol of rock, but a perusal of photographs that predate 1974 show other rock stars using the gesture.  This is now a moot point as on June 20, 2017,  less than 2 weeks after the filing, Simmons filed an express abandonment of the mark.  It appears that he sought registration of the hand gesture itself, rather than an image or depiction of the gesture, describing the mark in the application as “a hand gesture with the index and small fingers extended upward and the thumb extended perpendicular.”  While images or stylized drawings of hand gestures can function, and be registered as trademarks, either by themselves or as part of a design mark, hand gestures in and of themselves cannot function as trademarks.

Even if they could be registered as a trademark, how would one enforce such a thing against others?  That would be virtually impossible.

Nice try, Gene, but no go.

IRS Offers Tips for Teenage Taxpayers with Summer Jobs

Students and teenagers often get summer jobs. This is a great way to earn extra spending money or to save for later. The IRS offers a few tax tips for taxpayers with a summer job:

  1. Withholding and Estimated Tax. Students and teenage employees normally have taxes withheld from their paychecks by the employer.  Some workers are considered self-employed and may be responsible for paying taxes directly to the IRS. One way to do that is by making estimated tax payments during the year.
  2. New Employees. When a person gets a new job, they need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from the employee’s pay. The IRS Withholding Calculator tool on IRS.gov can help a taxpayer fill out the form.
  3. Self-Employment. A taxpayer may engage in types of work that may be considered self-employment. Money earned from self-employment is taxable. Self-employment work can be jobs like baby-sitting or lawn care. Keep good records on money received and expenses paid related to the work.  IRS rules may allow some, if not all, costs associated with self-employment to be deducted. A tax deduction generally reduces the taxes you pay.
  4. Tip Income. Employees should report tip income. Keep a daily log to accurately report tips. Report tips of $20 or more received in cash in any single month to the employer.
  5. Payroll Taxes. Taxpayers may earn too little from their summer job to owe income tax. Employers usually must withhold Social Security and Medicare taxes from their pay. If a taxpayer is self-employed, then Social Security and Medicare taxes may still be due and are generally paid by the taxpayer, in a timely manner.
  6. Newspaper Carriers. Special rules apply to a newspaper carrier or distributor. If a person meets certain conditions, then they are self-employed. If the taxpayer does not meet those conditions, and are under age 18, they may be exempt from Social Security and Medicare taxes.
  7. ROTC Pay. If a taxpayer is in a ROTC program, active duty pay, such as pay for summer advanced camp, is taxable. Other allowances the taxpayer may receive may not be taxable, see Publication 3 for details.
  8. Use IRS Free File. Taxpayers can prepare and e-file their federal income tax return for free using IRS Free File.  Free File is available only on IRS.gov. Some taxpayers may not earn enough money to have to file a federal tax return, by law, but may want to if taxes were withheld. For example, a taxpayer may want to file a tax return because they would be eligible for a tax refund or a refundable credit.  IRS Free File can help with these issues.