A Montage of Tax “Need-to-Knows”

For this Tax Season


We are approaching one of the most dreaded seasons in our Nation. Not a season of winter, or drought, but the dreaded tax season. Every year about this time people begin to gather receipts and other supporting documentation needed in preparation of their annual tax returns. This is especially true for Ordained and Licensed Ministers.


We need every legal advantage available, including knowledge of which others might be unaware if we are to obtain the largest refund possible. In today’s blog I wanted to make the reader aware of information that may be overlooked by others, or may seem insignificant.


Standard Deduction vs Itemization


Every year tax payers struggle with, “Do I have enough to itemize?” Sometimes it may not benefit to itemize, and other times it may. As tax payers we need to know which is best and how to get the most from each.


The Standard Deduction Amount for this year’s return is $12,600, plus an additional $1,250 for the spouse age 65 or older. Singles get $6,300, or $7,850 is the tax payer is at least 65. Head of Households come in at $9,250 plus an additional $1,550 once they reach 65.


Some tax payers may not have enough to itemize this year, however, the Internal Revenue Service allows for some deductions to be delayed until next year’s return. In this scenario the tax payer could claim Standard Deduction for this year, as he or she looked ahead at itemizing on the next return. It also works in reverse. If your itemized deductions top the Standard Deduction, you could shift some write-offs to 2015 and claim the Standard Deduction for 2016.


It is all about legally working within the system to get you the largest possible refund.


One thing that can greatly reduce the tax liability by increasing the Itemized Deduction amount is gifts to be considered as a “gift” for federal gift tax purposes. If you want to get it in for this year’s return make sure that the donee deposits your personal check by December 31st. It is not sufficient that the donation is received by the donee by this date, but it Must Be Deposited by the 31st. Then the money will count as a 2015 gift for federal gift tax purposes. For those who wish to donate via certified check, the amount is deductible if it is in the possession of the donee by December 31st, regardless of whether or not it is deposited by year-end. If you are giving securities, endorse them over to the donee and deliver them by year-end if you want the gift to count for 2015. The IRS allows a $14,000-per-donee gift tax exclusion for this year. If you do not take advantage of it this year, the unused amount is gone forever.


Any charitable donations are considered in the same manner. Make sure they are in on time to be deposited by the organization by year-end.


More Churches Will Be Covered by ACA Health Care Law’s Employer Mandate Next Year


We have had somewhat of a lull between the passing of this law and many aspects of its enactment. However, this is about to change. Effective January 1st of 2016, Churches with at least 50 full-time-equivalent employees must offer affordable health care coverage to full-time employees and their dependents, or pay a fine.


Dependents are considered to be child/children under age 26. Spouses, stepchildren, or foster children are not considered as dependents.


I have written in detail in the Blog – “Avoiding the Pay or Play Penalty” posted in December of 2015. Read and re-read it. No Church wants to be caught in violation.


Is Your Tax Preparer Being Scammed?


The Internal Revenue Service has issued warnings that scammers are targeting tax preparers with bogus e-mails. The e-mails ask the preparer to update their IRS e-services account.


The scammers are attempting to gain access to preparer’s usernames and passwords, which can result in them obtaining personal information from filed returns.


Always remember that the IRS does not send out e-mails for this purpose. Warn your preparer to not click on any links. The scammers may also use the telephone, so hang up on any calls that ask for such an update.


In Closing


The above mentioned tidbits are vital information for this year’s filers. At Chitwood and Chitwood we extend every effort to provide you with the necessary information to make your job as easy as possible.


While other preparers may not be as knowledgeable as they should on tax preparation for Ministers, we invite you to allow us to do your taxes. Last year we completed more than 31,000 and drastically lowered the tax liability for each. We can do the same for you.


Call us NOW at 800-344-0076 and allow us to do what we do for thousands – protecting your hard earned money. Our 77 years of expertise is why you need us in your corner this year. Don’t delay. Make that call!


Remember, for Chitwood and Chitwood it is “A Ministry – Not A Job”