Charitable Contributions of $250 or more

A donation of $250 to a charity in any one day requires that the charitable organization give you an acknowledgement letter which must state if you received anything of value in exchange for your contribution. The acknowledgement must be received by the taxpayer the earlier of the filing date of the return or the extended due date. There is no going back to the charity for a letter when your return gets picked for an audit two years later. You may want to reconsider monthly contributions where the amount donated is less than $250 but add up to more than $250 for the year. The charity is not required to give you an acknowledgement letter in that situation, but it may be helpful in an audit to have one.

Cash is Always Taxable

If you receive cash, gift cards, gift certificates, or any cash equivalent item from your employer, it is taxable and should go through payroll and end up on your W-2. De mimimus fringe benefits such as holiday or birthday gifts such as a turkey, coffee or soft drinks, occasional use of office equipment, and occasional sports or theater tickets are not taxable to employees.

2018 Estate and Gift Tax Exclusion

In 2018 the estate and gift tax exclusion increases to $11,180,000 from $5,490,000 in 2017. The exclusion is indexed for inflation each year until 2025. On January 1, 2026 the exemption reverts back to the 2017 level. The highest marginal rate for estate and gift tax is 40%. The annual gift exclusion is now $15,000 which means a gift tax return should be filed reporting the taxable gift but no tax is due by the donor until lifetime taxable gifts exceed $11,180,000. I believe that gift tax returns are not required when gifts of less than $30,000 are paid out of a joint account.