2 results for tag: IRS Regulations
Understanding Tax Deductions for Charitable Clothing Donations: The Case of Duncan Bass
Tax-related issues can be complex and challenging, especially when it comes to charitable donations. In this article I explore the tax-related problems faced by Duncan Bass, an individual with multiple jobs and businesses, who made substantial donations of clothing to Goodwill and the Salvation Army. By taking a look at Mr. Bass's predicament, our objective lies in delineating the core tenets and fundamental facets of tax deductions for charitable clothing donations, highlighting the importance of adhering to IRS rules and regulations.
Duncan Bass's Diverse Work and Philanthropic Endeavors
Duncan Bass exemplified a diligent work ethic, balancing ...
Don’t Expose Yourself with Improper Use of the $75 Rule
When the $75 rule applies, you don’t need a receipt.
The problem with this rule is that it is often thought to apply to all tax deductions. That’s wrong.
Now, think of the taxpayers who incorrectly apply the $75 rule to all of their tax deductions. They are exposed to a massive loss of deductions and likely some penalties too.
The $75 Rule
IRS Reg. Section 1.274-5(c)(2)(iii) contains the $75 rule.1 Notice 95-50 contains a clear explanation of what the $75 rule applies to.2 Here’s how it works:
You don’t need a receipt for business travel expenses that are less than $75, with two exceptions: (1) you always need a receipt for ...