Brief tax articles for charities

Here are a few articles on my growing backlog of ideas of interest to charities. Quick updates on a variety of topics: general reminders, maintain control over funds sent overseas, FICA taxes on 403(b) contribution, short list of regs impacting a missionary sending church, and cell phones as de minimis fringe benefit.

12/10/14 – Ministry CPA – 5 Reminders about Charitable Contributions – Check out the article for quick summary of:

  • Qualified Charities
  • Year-end Gifts
  • Itemize Deductions vs. Standard Deductions
  • Guidelines for Giving Clothing and Household Items (pay attention to documentation requirements)
  • Guidelines for Monetary Donations

6/1 – ECFA – A Recent IRS Ruling Reminds Charities of the Importance of Exercising Control and Discretion of Disbursements If your organization provides support to a foreign organization you must maintain control over the funds and discretion is how the funds are used.

The IRS revoked exempt status for an organization because too much of their expenses (technical description is “more than a substantial part”) did not further their exempt purpose. Fallback reason for contributions not being deductible is because the organization did not maintain sufficient control and discretion over the disbursements.

Article reminds us that a US charity must fund specific projects which are approved in advance of sending money. Check out the article for a few more details and a link if you want the full story.

2/16 – Ministry CPA – 403(b) Employer Contributions – Subject to FICA Tax? – Check out article for simple yes/no answer on employer contributions. There’s more nuance for employee contributions.

10/17/14 – Ministry CPA – Cautions for a Church Serving as a Missions Agency – Before your church decides to change the world by sending out your own missionaries, it is imperative you count the cost.

Becoming a missions agency means you will take on a tremendous amount of legal requirements. I only mention two out of a long list of rules: Foreign Bank Account Reports (FBARS) and Foreign Account Tax Compliance Act (FATCA). If you don’t know what those are, you really need to do some research.

Before you make the jump, make sure you know what obligations you’re taking on.

10/3/14 – Ministry CPA – Cell Phone Reimbursement by Church – Check out the article for the boundaries of considering personal use of a cell phone as a de minimis fringe benefit and therefore not reportable as taxable income.

More quick reads to follow later.

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