Holidays are around the corner!
And after that, guess what? Tax season!
Of course taxes are not a priority right now, but maybe you should have them somewhere in the middle of your to-do list before year ends.
There are activities that should be done by December 31, 2014, in order to take some deductions for the year, reviewing your charity donations receipts, for example. If you have donated $250 or more during the year to a not-for-profit, you must have a receipt of acknowledgement that you did not receive any goods or services in return. This wording must be in the letter or receipt. Otherwise, the deduction may be disallowed even if you have the cleared check or credit card charge clearly identifying the non-for-profit.
And if you make non-cash contributions, you should comply with the formalities of having the donor acknowledgment of the donation, description of the donated property and contribution dates. When donating property which value is $5,000 or more, other formalities should also be followed. As they say, consult your tax advisor.
When you receive Forms 1099, make sure that the amount of income is the correct amount and that your personal information is correct. And when you receive Forms K-1 from partnerships or S-Corporation, make sure you receive also a statement showing your basis with that entity. As they say, consult your tax advisor if you are not sure how to proceed on this regard. Knowing your basis in the entity you are a partner or a shareholder, can make the difference between been allowed to take losses or not.
As you can see, there is at least one thing you should do before year ends: talk to your tax advisor.
Thank you to all our clients and friends for their referrals.
Julia Chong, CPA