Do races for charity count as tax deductions?

I just ran in a 10K race for charity. Can I write off the .00 enrollment fee on my taxes?

how do charitable tax deductions work?

Ok so if my husband is making past the 100k annual bracket. We are obviously getting taxed tens of thousands. So theoretically speaking, lets say I get taxed ,000 this year. If I donated ,000 to charity (non profit) will my tax "deduction" lower my annual tax to just ,000…. or does it work in a differe way
omgosh please help!!!

What are the most unusual and overlooked tax deductions?

I know you can deduct your mortgage interest, charity and some other things, but I was surprised to find out that things like contact lenses or job searching expenses can also be deducted. Can you list some other deductions that many people haven’t even heard about?

Can you please explain tax deductions in detail?

I get the basic gist that you don’t have to pay taxes on whatever amount you deduct. But I don’t understand how you claim deductions and what is claimable. Are tuition and student loans able to be deducted? What is a standard deduction vs an itemized deduction? Why do most people have a standard deduction and at what point would you do an itemized deduction?
What are the general tax brackets and how do they play into it?
Thanks
I am a married student and I have a bunch of student loans. My husband is the primary income earner of our household since I’m in school. We rent a house. I’m probably going to give my car to charity and sometimes we make other charitable donations.
What sort of things could I/ we claim as a deduction?

If I build something as a donation to a charity, what tax deductions can I take?

A friend asked me to build a picnic table to donate to a local charity. Constructing the table will cost me roughly in materials. Similarly built (same materials, same design, etc.) picnic tables are selling for 0 at a nearby home center. Can I take a tax deduction for the retail value of the completed table, even though I am not a licensed carpenter? Or is my deduction limited to the amount I spent on the raw materials alone?
Thanks for all the responses, but as there is a desparity in the answers, I will have to leave this up to a vote. Hopefully the best answer is also the correct one.

Charity and tax deductions – does it defeat the purpose of charity?

When you make a charitable donation you are able to claim it on your taxes and you receive a deduction.

This would obviously be a benefit and urge some people to donate more, but to me I feel it defeats the purpose of "charity." I always thought of charity as a give something for nothing in return sort of deal… but maybe I am wrong?

Do you feel as though tax deductions for charity is defeating the purpose of the meaning and integrity of charity?

Can I receive tax deductions for contributing to a charity if I am claimed as a dependent?

My parents are claiming me as a dependent on their taxes. I made a monthly tax deductible cash contribution to a charity. I was wondering if I could itemize the deductions, or if my parents could since they claim me.

Income Taxes Accounting Lectures

income taxes accounting lectures

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1. Gain new pro and marketable skills while working at your own pace. ? Each year there’s a noticeable shortage of qualified Tax professionals. All 4 of the major Tax service Franchises ( H & R Block, Jackson Hewlett, Liberty Tax, and Instant Tax ) set up tax classes to extend the possibility of having enough tax execs to work in their Franchises. Unfortunately, having taught these basic tax classes, the coed drop out rate is high. It is serious pressure to work a full time job, learn tax law/codes, go to college two nights a week, do your homework, and get ready for Thanksgiving in the middle of the Tax Class Schedule. Online Tax School could be a life saver, particularly if you have children. ( Instant Tax does offer training beginning any time of the year )

2. You can be enrolled, trained and licensed to do Taxes in the state of California or any of the fifty States by the time the heavy hitters offer their $200 Tax Class in Sep, October or crash course in November.

3. Train to the state of California?s standards. Not all states have an imperative duty to get a Tax License , however , once you qualify under California?s standards you’ll be qualified for an entry level position with IRS or to work for one of the major Temporary Accounting Agencies, such as AccountTemp or Accountants, Inc or Robert Half, global or a CPA or a Major Bookkeeping Company or to work for your self. Having the ability to take it slow and learn at your own pace is critical when it can imply the difference of $7.50 an hour and $18 to $25.00 per hour

four. When you join up to an internet Tax class, you don?t have to cope with lecture room dynamics, you just do your course work, take your test on line, e-mail your teacher if you have a question and receive your certificate and follow through with your State?s needs for Tax executives and of course register with IRS. No Problem, No fuss. All of the information is provided in the class.

5. Taxes Will Travel a mobile Tax Service in the San Francisco Bay Area actually provides job placements for graduates from its Online Tax college and is one of the sole mobile tax service Franchise available in the country. The TWT curriculum is provided by Educational wholesalers located on the East Coast. The Wholesaler for the learning material essentially holds the licenses for the different state qualifications. The uniqueness of these programs comes with the policy and process of the different online schools.

6. Completion of Tax School will enable you to start your own tax business in your office or home. This will allow you to charge up to $50.00 per hour and in some cases much more if you go on to become an Enrolled Agent.

7. Online Tax colleges that can qualify you for California?s standards range from $199 to over $1500. Its really interesting because, remember the educational Wholesale provider I spoke of? They sometimes supply the coaching for over half of the web Tax coaching.

8. Tax School won?t make you rich, but it will give you options, a foundation for a new career and around $7,500 to $15,000 more income each year working part-time. The Big Boys, as I call them frequently pay their workers Bonus based on the revenue after the Tax Season ends, plus they get a base hourly wage.

nine. Enrolling and completing tax school will put you in the line up for what I call the ?Half-Year Tax Professionals? They do taxes 5 or 6 months out of the year and spend the other half of the year traveling. How do I know? I meet them at the IRS Tax professional Forum which is usually held in giant towns like Las Vegas! They adjust their travel schedules to accommodate and attend the IRS conventions ; in fact , you have to act like you work all year! This select set of people is the envy of all of the new tax professionals. you need to know these Tax Professionals try hard and smart. They rarely loose a customer, they send birthday cards to clients and present certificates for memorable occasions and quarterly tax newsletters. They spend several years building their customer base while charging $150 to $200 ( sometimes more ) per tax return. They tend to stay out of their client?s personal lives and they live modestly while going to different parts of the world annually. ( I give my client?s a gift when I deliver their taxes. My clients are spoiled, they don?t know what it is to sit in a tax office and wait. For them Taxes Will Travel is the way to go )
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10. There is a new, service which has purchasers in the tax industry humming. It?s the ?get your refund the last week of December or the 1st week of January? If your last pay period for the year is December 15 through the 28th and you had your taxes completed at one of the tax stores that provides this service you can get your refund, using your paycheck stub, before Yuletide or New Year?s. At the time this article was released more info was still becoming available on this new service. This will surely generate more excitement in the Tax Industry. Tax stores more then likely will charge a bit more for this unique service, and a little more times five to 10,000,000 folk is lots more, so this might be the time to enroll in your nearest online tax school.

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2006 Taxes Charitable Donations

2006 taxes charitable donations

Tax deductions that may not be deductible

You often hear, as someone said, "it is tax deductible." In reality, the Costs are mentioned, can be deducted, but you may not be able to deduct it. Why should this be?

Normally, the costs referred to deductible, such as a detailed deduction. The percentage of tax filers that itemized in 2006 (the most recent year available) was 13.80. So should They are one of one of seven taxpayers who itemize to deduct actually used.

But just because you do not itemize means that you may deduct some costs. Medical expenses, health insurance premiums, doctor visits, hospitalization, dental, eyeglasses, chiropractic, etc., included are limited to 7.5% of Gross income. This means that if your income is $ 50,000, before any medical expenses can be deducted would have to exceed $ 3,750.

Other elements such as expenses necessary for employment and other deductions are limited to 2% of your gross income. With the same $ 50,000 would need more than $ 1,000 before these costs are deductible to spend.

Charitable donations are limited to 50% of gross income. So when you could only deduct $ 50,000 $ 25,000 in donations. This is not a limiting factor very often.

The main limitation of deductibility is the standard deduction amount. The standard deduction is $ 8,400 for head of household, $ 5,700 for single filers and married application individually and $ 11,400 for married couples filing jointly. The amount of Deductions must be itemized you exceed these amounts before you make use of it. Therefore, less than 14% of the units could the benefits of itemized deductions.

Even expenses such as mortgage interest and property taxes not be deductible if they do not urge that your Deductions total over the limit. A method for maximizing the property tax is payable to a year tax beginning in January and next year the taxes in late December. By that two years of taxes in one year's thrown a pot.

So you see, that before you think it is an expense deductible for tax purposes, must Check to see if it really for you.

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Income And Corporation Taxes Act

income and corporation taxes act

TO FILE OR NOT TO FILE YOUR TAX RETURN- THE NON-COMPLIANCE GAMBLE!

Rule of law and equality before law are hall marks of civilized societies. Laws in money matters are aimed at , inter alia, providing a fiscal balance in the society as well as funds for development of a nation as a whole. Tax laws should be effective to achieve these goals. And like all other laws what makes them effective is  the way in which people feel it runs with their interests and not against them.

In this article, as the title suggests, we would see why people do not file tax returns as required under the law. Are there lacunas in the law? Are laws irrational? Are they discriminatory? Do they promote inequality? Are they creating distortions in the system? Is it reflective of the general attitude of our society towards law of land? Or is trickle down effect of big-wigs’ flouting of the constitution of Pakistan? These and similar other questions are relevant to understand the behaviour of non-compliance of tax laws in general and non-filing of tax returns in particular. So in effect, it boils down to one question- is it worthwhile to file a tax return or is escape  the better strategy from the point of view of a (non-)filer of returns.

Who are required to file return of income tax?

According to the Income Tax Ordinance, 2001,  the following persons are  required to file tax returns.

 (a)       Every company irrespective of income earned.

 (b)        Every  person other than a company whose  taxable income for the tax year 

            exceeds Rs. 100,000/- 

(c)        Every person who was charged to tax in any of the two preceding tax years.

(d)      Every person who owns immovable property with a land area of two hundred

          and fifty square yards or more.

(e)     Every person who  owns any flat located in areas falling within the municipal 

         limits existing immediately before the commencement of Local Government laws

         in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory.

(f)     Every person who wants to claim a loss for carry forward.

Prior to finance Act, 2005 the following persons were also required to file returns:

 (a)    Every person who was a subscriber to telephone whether mobile or landline.

 (b)    Every person who was an owner of a motor vehicle.

 (c)    A member of a club having either admission fee of Rs. 25,000 or monthly 

         subscription of Rs. 500/- 

(d)    Everyone who took foreign travel other than for Umrah, Hajj or Ziarat.

 Some of the criteria looked ridiculous, however they remained on statute book for a long time. If data of the CBR given in the Year Book 2004-05 is correct, then it is a cause for great concern. Total number of NTN holders in a population of 152.5 millions is only 2.28 million. Out of NTN holders, only 1.23 millions filed returns in 2004-05. Whereas return filers are only 1.23 million and details are given by the CBR as under:

 “Whereas the share of return filers to NTN holders has been around 54%, the share of the same to live cases has been 72.4%. Segregating this information into individuals and corporate categories it has been observed that within the former category (salaried and business persons and AOPs) having NTN, nearly 50% had filed their returns and within the corporate sector, the compliance rate has been around 55%. However, the compliance rate of private companies was at least five times superior to that of the public (listed) companies where it was in the range of only 10%. Incidentally, the compliance rate of the foreign companies has been extremely low at around 3%. Since this situation requires immediate correction through further research, CBR has already embarked upon an extensive effort to streamline the income tax base including the list of withholding agents.”  

 Whereas as per SECP total number of registered companies as on 31st December, 2004 was 45028, total returns from this sector during 2004-05 were only 12526 (27.8% of registered ones) which indicates the huge task CBR faces and requires skilled staff instead of wasting time in planning what to do about 11000 officials feared to be redundant as a result of so called reforms.

 CBR thinks further research is needed for correction of the situation as if it were not evident. CBR  keeps harping on the same string that tax base is small and it is trying to broaden the tax net. Far from truth. Pakistan has a very large tax base. Courtesy of the CBR’s policy of withholding and collecting taxes at source, almost everyone is now either tax payer or tax collector (Unpaid Tax Collectors). Even if sales tax is ignored, see the “net” of indirectly collected direct tax. The following data will indicate the number of taxpayers in Pakistan which denies claims of CBR.

 Total population                                                      152.5 Million

 Labour force                                                             45.76 Million

 Unemployed                                                               3.52 Million

 1/3rd labour force below poverty line                  15.00 Million

 If all the balance labour force is assumed to earn taxable income, it would be 27.24 Million. Now let us see how many tax payers are there in Pakistan on account of tax collection at source from 3 venues only.

 Profit and loss account holders/

 Fixed or Term deposits                                                       20.00  million

 Telephone subscribers  cell phone users                         23.20  million

 Commercial and industrial connection of

 electricity (KESC not counted)                                            2.20  million           

 Tax on cash withdrawals (all accounts)                            26.00 million

 Apart from it, tax is also collected/deducted at source on rent paid, value of imports and exports, payments made for supplies and services rendered, salaries, brokerage and commission, from motor vehicle owners, etc.

 In my humble view instead of broadening the tax base it is time to narrow the tax base. Instead emphasis should be on recovery of “due tax” from the persons who should pay tax as required under the law of land. Emphasis should be on getting returns filed where they are due.  Mindless imposition of withholding taxes is not panacea to broaden tax base. Why people do not file returns when tax is deducted at such a large scale? The possible explanations might be as under:

1. The tax deducted/collected at source like electricity bills, prepaid phone cards, etc. is so small at individual level and people do not want to indulge in the process of filing returns even if they have incomes below taxable limits. They think cost of getting refund of their taxes would be higher than the amount of refund they would get. So they let their money   remained with the CBR as unclaimed deposit. As a matter of fact, CBR   should indicate figure of tax collected but not due each year so that clear    picture of “due” tax collected is reflected. It is highly deplorable that CBR  collects advance tax from such persons in the first instance and then retains it unauthorizedly. True tax reforms call for return of “undue  tax collection”.

 2.      Many of them do not want to be in the “tax net” because they  understand their  actual tax liability would be much higher if caught in the “tax net.”  Such behaviour is not irrational even though it may seem unethical. 

3.     They believe the government is not worthy of more taxes as their money is          not spent on them. Corruption and leakages in the system, low priority to            social sectors , huge unproductive expenditure on large sized federal and   provincial governments and exemptions to vested classes of the society   subdue the pricks of ethics in the prospective tax payers.

 4.     The departmental officials do not see beyond return filers. Once you file a            return, the tax collector puts your name on tax rolls and your absence will   be noticed. But those who escape this tax roll, they remain unnoticed  (sometimes with the connivance of the tax officials) for years and years. Policies of the CBR reward non-filers and punish regular taxpayers. First  of all they seldom issue notices to people who are not on tax rolls. The much trumpeted survey conducted by spending millions of rupees failed to increase tax base. Rather it eroded whatever image CBR had in the eyes of people as an enforcement agency. Amnesty Schemes so often         offered in Pakistan give message to the tax evaders that they would get such chances in future too. So why pay taxes voluntarily now.

 5         Tax amnesties prove effective where laws are enforced with full vigour. It             gives tax evaders a window of opportunity to make their record clean.

 6.        CBR has not taken any action against persons who neither availed   amnesty nor paid taxes before or after this amnesty. In a culture of  immunities and impunities no one cares such amnesties.

 7.        Our tax law favours tax evaders and avoiders. Taxpayer and tax-evader     are two brothers. Taxpayer kept on paying income tax each year @ 35% of  his upper bracket income for 10 years. Tax-evader never filed return. After  10 years he was caught in “tax net”. Notice was issued. He files tax return showing below taxable income. When asked to explain from where he got money to purchase the plot he owned in defence, his explanation was that  he got a prize bond and he produces receipt of the same which is obtainable from the market by paying a little more than the prize money and tax deducted would be 10%. That is it. Instead of 35% he ends up with 10% or so and no hassle of filing return over the years. All money is white       now. Foreign remittance is perhaps the cheapest way to whiten your money earned in Pakistan but given flavour of foreign remittance.

 8.           You may purchase a plot for Rs. 15 million and CBR will ask you to explain only to the extent of DC rates of the property. So you plough back  your untaxed business profits into cash economy and at the end you will also enjoy legal cover as capital gains on immovable property is forbidden   tree for taxation.    

9.    It looks as if the government chooses to withhold/collect tax from such      sectors which it thinks would not file returns and not claim refund of taxes withheld as advance taxes. My this impression emerges from the     fact that tax on commercial electricity bills is collected without any lower   limit. Similar is the case with pre-paid cards. While capital gains on listed  shares is exempt, tax is withheld on transactions of such shares. 

Achieving tax revenue target should not be the only criteria to judge performance of the CBR. Ascertainment of actual potential of tax revenue, extent of realization of this potential, progressiveness of structure of taxation, its impact on the economy and extent of reducing income inequalities in the economic system are all relevant in evaluation of the performance. Promoting tax culture is as much need of the hour as controlling unwanted, useless, unproductive expenditure. There is a strong case for paradigm shift in attitude of CBR. The non-compliance gamble which at present swings heavily in favour of non-filers should be shifted against them. They should feel themselves at some disadvantage vis-à-vis  tax law compliant citizens of Pakistan. Only culture of fairness and equity can promote tax culture otherwise you may continue to achieve targets without achieving objectives of taxation.

( Published in the Business Recorder, May 26, 2006) 

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