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FAQ - technical
What’s the mileage rate for charitable driving?
14 cents per mile.
How much can we reimburse employees when they use their own cars?
Deduction of employee car or truck expense, especially non-mileage expense, is a complex topic. See http://www.irs.gov/businesses/small/industries/article/0,,id=97616,00.html.
How can professionals deduct the value of services provided?
Basically, they can’t. Time and services volunteered, along with a whole bunch of other implicit donations, are nondeductible; for details, see the section “Contributions You Cannot Deduct” in IRS Publication 526.
How can donors substantiate cash donations for tax purposes?
For small donations, encourage them to keep canceled checks or credit card receipts. Any donor who gives $250 or more must receive a statement from you, specifying the amount of the donation and any goods or services you’ve supplied in return.
How can donors deduct the value of donated goods?
They can deduct fair market value based on the going rate for comparable items – which will probably be less than they think! Any donor who gives property worth $5,000 or more must support the claim of fair market value with a disinterested appraisal.
What are the rules for donating stock to charity?
A donor who has held stock for less than a year can deduct the cost basis. If the stock has been held for a year or more, it can be deducted at appreciated value. For actively traded stocks and bonds, the fair market value is the average of the highest and lowest selling price on the valuation date.
Can you explain the different forms in the “Tax Return” packet?
See Nonprofit Tax.
Should we get a 401(k) and a 403(b) and an IRA and a SEP-IRA?
These are very complicated questions which should be answered by a pension and retirement professional. Contact us and we can point you in the right direction.
How do we determine how much of a government award has been earned?
That would depend on the conditions of the award. In most cases, government awards are earned on a cost reimbursement/service outcomes basis. In other words, until you have completed the contracted tasks and spent the money, you haven’t earned the award and shouldn’t have the cash on hand. See this site for more information.
When do we need an A-133?
As soon as you spend $500,000 or more of Federal grant money in any one year. Click here or consult this government resource.
What does “private inurement” mean?
It means that a private individual connected with a nonprofit agency is benefiting in some way from the agency’s earnings – and it’s very dangerous! See this site for more details.
You can get the answers to many of your other questions from the Nonprofit Genie at Compasspoint.
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