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As with any other topic, the internet provides a wealth of resources for taxpayers. Here are some websites and web pages that provide information, tools and resources to help you with year-round tax planning and assist in preparing your Form 1040.

www.att.com/ir/ss/tbi

When you sell stock you need to determine the “cost basis” of the shares sold so you can calculate your capital gain or loss. With the “divestiture” of ATT in 1984, and all the splits, both positive and reverse, spin-offs and mergers that have followed, determining the cost basis of ATT stock sold, as well as the basis of the various spin-off companies’ shares, is a real project. Go here for Tax Basis Worksheets for each individual event in the history of ATT from 1959 through the present.

www.oanda.com/convert/classic

This “address” will direct you to a foreign currency converter that can provide current and historical exchange rates for 164 currencies.

www.bigcharts.com

You can use this site to find the price of any listed stock or mutual fund on any exchange for any given date. If you inherit an investment, your cost basis is the fair market value of the investment on the date of death of the person from whom it was inherited. This information is generally reported on the federal estate or state inheritance tax return. However, when you sell the stock you inherited you do not always have ready access to this information. You can calculate your basis by going to this site and, under “Historical Quotes”, enter the ticker symbol of the stock and the date of death, or the business day closest to the date of death, to get a price quote. If you sell stock that you received as a gift, your basis is either what the donor paid for the stock or the fair market value at the time the gift was made. You can also use this site to determine a cost basis for gifted property.

www.kbb.com

While the rules for claiming a deduction for donating a car to charity have drastically changed, there are still situations where you will deduct the fair market value of the automobile. Click on “Used Car Values By Make and Model”, enter your zip code, enter the year, make and model of the car donated, and click on “Kelley Blue Book Private Party Value”. You will then enter detailed information on the car donated, such as mileage and condition, and get a value. You should do this on the day you donate the car to charity. Print out the result and file it with the paperwork for the donation.

www.calctools.com/newrmd.htm

You must begin to take annual required minimum distributions from a traditional IRA or employer pension account by April 1st of the year following the year in which you turn age 70 1/2. This address takes you to a calculator that will determine the amount of your required minimum distribution for the year.

www.investinginbonds.com

Click on “CALCULATORS” in the menu at the top of the page. Then click on “Taxable/Tax-Free Yield Equivalent Calculator”. This calculator will allow you to determine what you need to earn on a taxable investment to equal the tax-free yield of a municipal bond or a bond fund.

www.easysaver.gov/sav/sav.htm

This section of the website of the Bureau of Public Debt provides a variety of information, calculators and services for individuals who have invested in or are thinking about investing in US Savings Bonds (all series). Click on “Savings Bond Calculator” under the heading “What Are Your Bonds Worth?” to determine the amount of interest earned on a bond for the year if you have elected to report accrued savings bond interest annually on your tax return. You can also go here to find out if your savings bonds have stopped earning interest and to purchase bonds online.

www.gsa.gov

If you travel for business, instead of deducting your actual expenses for meals and incidental expenses you can elect to deduct the federal per diem amount for the location of the travel. Click on “Per Diem Rates” under “Travel Resources” to find the federal per diem rates for Lodging and Meals and Incidental Expenses for domestic business travel effective for 2005 and prior years. FYI, “incidental expenses” include fees and tips for porters, baggage handlers and maids, but does not include the cost of laundry or phone calls.

www.state.gov/m/a/als/prdm/2005

This address will take you to the State Department per diem rates for Lodging and Meals and Incidental Expenses for international travel during 2005. Ust these amounts if you travel overseas for buisness. To check the per diems for a prior year, substitute the year for 2005 in the “address”.

www.toolkit.cch.com/p07_2740.asp

This brings you to a calculator that will help you determine your allowable home office deduction. It is from Commerce Clearing House, the premier tax law publisher.

www.charitynavigator.org

This site will help you to make intelligent charitable giving decisions. It provides information on and evaluates the financial health of over 4000 charities. It also has articles and guide on contributing to charity.

www.redleafinstitute.org

The Redleaf National Institute helps child care providers successfully manage their business. The site offers news, information and publications on recordkeeping, taxes, IRS audits, contracts, insurance, and other child care business issues. It provides access to other child care business resources and organizations, and has a state-by-state listing of tax professionals who prepare tax returns for child care providers.

The above web addresses, and many others, are listed on the FEDERAL LINKS Page of my website at www.robertdflach.net

Copyright (c) 2005 by Robert D Flach LLC

Robert D Flach is a tax professional with 34 tax seasons of experience preparing 1040s for individuals in all walks of life. He writes THE WANDERING TAX PRO weblog (http://rdftaxpro.tripod.com/weblog) and the free monthly online newsletter STUFF AND SUCH (http://rdftaxpro.tripod.com/stuffandsuch). He also writes and publishes THE FLACH REPORT, a quarterly print tax newsletter.

Tags: Federal Income Tax, federal tax, Income Tax, tax, tax planning, tax resources, tax returns, taxesFederal Income Tax, federal tax, Income Tax, tax, tax planning, tax resources, tax returns, taxes

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I often receive questions from clients and readers about what can and cannot be deducted as a charitable contribution on Schedule A.

The following items are not deductible:

* Contributions made directly to an individual or family, regardless of the recipient’s financial situation or health status.

* Contributions to an organization created to lobby for changes to federal, state or local laws.

* Contributions to political organizations or election campaigns.

* The value of blood donated.

* The value of your time to perform volunteer services.

* Contributions to non-profit homeowner or condo associations, or social or sports clubs.

* Contributions to foreign organizations.

* Raffle tickets. These can, however, be deducted as gambling losses if you have any gambling winnings to report.

* The rental value of the use of a vacation property donated to charity for a “vacation auction“.

* Appraisal fees to determine the value of donated property (required if the value of the item donated is more than $5,000.00). These fees can, however, be deducted as a “miscellaneous deduction” subject to the 2% of AGI exclusion.

You can deduct:

* Cash or property given to a qualified tax-exempt organization created or organized in the United States or any possession under the laws of the United States or any state or possession (special rules apply for donating a car to charity - but that is a topic for another article).

* Out-of-pocket expenses connected with donations or volunteer service to a qualifying church or charity, such as the cost of the ingredients of homemade cookies or a cake donated to a church bake sale, or the cost and laundering of uniforms for a scoutmaster.

* Travel and transportation expenses incurred while performing a volunteer service for a qualifying church or charity. If you use your car you can deduct 14 cents per mile in lieu of actual expenses plus any parking fees and tolls.

* That portion of the cost of a ticket to a fund-raising event that is in excess of the “fair market value” of any goods or services you receive. If you buy a ticket for a fund-raising dinner, and the cost of the dinner is $35.00, you can deduct only $65.00.

copyright (c) 2005 by Robert D Flach LLC

Robert D Flach is a tax professional with 34 tax seasons of experience preparing 1040s for individuals in all walks of life. He writes THE WANDERING TAX PRO weblog (http://rdftaxpro.tripod.com/weblog), the free monthly online newsletter STUFF AND SUCH (http://rdftaxpro.tripod.com/stuffandsuch) and the website http://www.robertdflach.net, with a wealth of tax planning and preparation advice and information. The above article is taken from a posting to THE WANDERING TAX PRO.

Tags: charitable contributions, deductions, Federal Income Tax, Income Tax, tax, Tax Deductions, taxescharitable contributions, deductions, Federal Income Tax, Income Tax, tax, Tax Deductions, taxes

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If you son or daughter had a summer or after-school job this year you should seriously consider opening up a ROTH IRA account.

To be eligible for an IRA your child must have “earned income”, such as wages that are reported on a W-2 or “net earnings from self-employment”. Money you give your child for doing chores around the house won’t count as earned income, but earnings from babysitting or mowing lawns may qualify.

You can contribute 100% of your child’s earnings to the account, up to a maximum of $4,000.00 for 2005. If your son earned $2,400.00 for the year you can contribute $2,400.00 to a ROTH for him. If he earns $4,500.00 you can contribute $4,000.00. You have until April 17, 2006 to open the account and make your contribution for 2005.

If you are self employed you can hire your child to work in your business and pay him, or her, a salary. A sole-proprietor who pays a salary to his or her child who is under age 18 does not have to pay the federal, and probably state, government any payroll tax on the wages. Of course the child must be paid a reasonable salary for doing actual work. You can put the wages, up to the $4,000.00 maximum, into a ROTH IRA.

Your child will not get a current tax deduction for contributions to a ROTH IRA, but then most teen-agers don’t need the deduction. A dependent child can earn $5,000.00, including up to $250.00 in interest, dividends and capital gains, before having to pay any federal income tax.

Distributions from a ROTH, after age 59 1/2, will be exempt from federal and state income tax, assuming, of course, Congress does not change the rules in the future. Even if Congress was to revise the ROTH rules down the road it is very unlikely that any changes would be retroactive, so earnings on a ROTH up to the point of change should remain tax-free.

You can use a ROTH IRA as an incentive to encourage your children to work or to save. If your son earns $4,000.00 in a part-time job put $4,000.00 into a ROTH IRA for him. Or, if your daughter agrees to put $1,000.00 of her salary in a ROTH give her a 3-for-1 match and put in another $3,000.00.

There is nothing in the tax code that says that the money deposited in an IRA for your son or daughter has to come from the child’s funds.

The $4,000.00 maximum applies for tax years 2005 through 2007. It increases to $5,000.00 for years thereafter. The maximum applies to all IRA accounts. You cannot contribute $4,000.00 to a traditional (deductible) IRA and another $4,000.00 to a ROTH. If you put $1,000.00 in a traditional IRA you can only put $3,000.00 in a ROTH IRA.

If you put the maximum into a ROTH each year for your child beginning in 2005, when he/she is age 16, and continuing through 2010, when he/she will turn 21, and no other contributions are ever made, the account could grow to as much as $500,000.00 by the time the child reaches age 65, depending on the interest rate over the years. And it is all completely tax-free!

There is one potential problem with opening a ROTH account for a child. As with a “Uniform Gift to Minors” custodial account, once the child reaches the “age of majority“, usually age 18, he/she will have full access to all the funds in the account and can “take the money and run”. In such a case the child will be taxed on the earnings in the account and will have to pay a 10% premature withdrawal penalty.

Robert D. Flach is a tax professional with 34 tax seasons of experience preparing 1040s for individuals in all walks of life. He writes THE WANDERING TAX PRO weblog (http://rdftaxpro.tripod.com/weblog), the NJ TAX PRACTICE BLOG (http://rdftaxpro.tripod.com/newjerseytaxpractitionernetwork), and the website http://www.robertdflach.net, which has a wealth of tax advice and information. He also writes and publishes THE FLACH REPORT, a quarterly tax newsletter. The above article is taken from a posting to THE WANDERING TAX PRO.

Tags: Federal Income Tax, Income Tax, Roth IRA, tax, Tax Deductions, taxesFederal Income Tax, Income Tax, Roth IRA, tax, Tax Deductions, taxes

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