Washington Accountant Firm
Washington Accountant Firm

Resources, Tools & Cautions

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IMPORTANT TAX CONSIDERATIONS FOR TAX YEAR 2016


Tax

Property & Sales Tax

Starting a Business

Business

Employers

CAUTION: Beware of the Common Dependent Trap!

If you have dependents whom you intend to claim on YOUR tax return but who are also going to need to file THEIR OWN tax return, THEY CANNOT CLAIM THEMSELVES AS EXEMPTIONS. If they claim themselves, then YOU cannot claim them on YOUR tax return.

This will also affect your eligibility to take the education deduction. Please coordinate with your teenagers and college students before they file their own returns

CAUTION: Are You Undervaluing Your Non-Cash Donations?

We've observed that many of our clients undervalue their non-cash donations to Grannys Attic on Vashon, The Thrift Shop on San Juan Island, The Exchange on Orcas and other similar charities.

When you drop off your non-cash items, do make a dated list of what you drop off (4 pairs pants good condition) and have the recipient sign the list. (If you're using a drop-off bin, staple a dated list with a self-addressed stamped envelope to your donation bag, keep a backup copy for yourself.)

To assign values to non cash donated items go to, Goodwill Industries Valuation Donation Guide. If you have an unusual item that you are donating (pool table, car, boat, horse), you will want to try to value it yourself and include the value on the signed receipt. A good place to get an approximate valuation is an on-line sale site like eBay or Craigs List. See also IRS Pub 561, Determining the Value of Donated Properties. Contact us for more information.

All items donated must be in "good used" condition in order to be deductible and you must have a receipt.

CAUTION: IRS Guidelines for Charitable Donations

The IRS requires that taxpayers have records for all cash charitable contributions.

You need to have either a bank record of the transaction (cancelled check or account statement) or a written statement from the charity documenting the contribution amount and date donated.

This means, you cannot deduct the $1.50 in change you give to the Salvation Army. We suggest that you always use checks instead of cash or credit card when making charitable contributions that you wish to deduct.

CAUTION: Are You A Victim of Identity Theft?

If your federal tax return was victimized by identity theft or if, in the future, your return has the potential to become a victim due to identity theft that has occurred in your life, you can submit an Identity Theft Affidavit to the IRS. They will place an indicator on your account to make sure your federal tax return is not being filed fraudulently.



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