The following are the revised Stay NJ benefit amounts for tax year 2025:
For tax year 2024, you can check how your remaining 2025 quarterly benefits were impacted, if any, by the new budget here: Property Tax Relief Benefit Status – NJ Taxation
Please see NJ Division of Taxation – Stay NJ – Property Tax Relief for Senior Citizens for more information
Please see update below from NJ:
The Division of Taxation sent the second installment of the 2024 Stay NJ benefit on May 15, 2026. The next installment is expected to be sent in August 2026, subject to appropriation in the Fiscal Year 2027 Appropriations Act.
See NJ Division of Taxation – Stay NJ – Property Tax Relief for Senior Citizens for more information.
Please see 5/11/2026 update below from the New Jersey Division of Taxation:
| Property Tax Relief Programs Payment Schedule |
| The Division has posted updated information regarding the payment of benefits for various property Tax Relief programs. The Stay NJ benefit is paid in equal, quarterly installments. We expect to send the second installment of the 2024 Stay NJ benefit on May 15, 2026. Eligible recipients will receive paper checks in the mail. The third installment is expected to be sent in August 2026. Senior Freeze payments begin on July 15 and will continue on a payment schedule, depending on when you apply. ANCHOR payments start September 15 and will continue on a rolling basis, with most applicants receiving payment within 90 days, unless additional information is required. |
See NJ Division of Taxation – Property Tax Relief Programs for more information.
Please see below for an update from the New Division of Taxation:
| Property Tax Relief Program Updates |
| The Division has updated its Property Tax Relief webpages and forms for the New Year. This month, we will begin mailing the Property Tax Relief Application, Form PAS-1, only to those applicants who filed a paper application in the prior application years, or to those who may be newly eligible for the Senior Freeze (Property Tax Reimbursement), ANCHOR, and Stay NJ Programs. Applicants age 65 and over – or receiving federal Social Security Disability benefits, or Railroad Retirement Disability benefits – will submit a single application to claim benefits from Senior Freeze, ANCHOR, and the new Stay NJ program. The deadline to apply for the 2025 application is November 2, 2026. We will begin issuing first-quarter payments for the 2024 Stay NJ Program on February 9, 2026. Most eligible filers under 65 and not collecting Social Security Disability Benefits will have their ANCHOR application, Form ANC-1, auto-filed and will receive an ANCHOR Benefit Confirmation Letter in August 2026. |
Please see increased State and Local Tax (SALT) deduction information below from the IRS. It could be a good year to prepay the 1st and 2nd quarter 2026 property taxes before year-end. Please reach out to me if you want to discuss further.
An increase to the limitation on the itemized deduction for state and local taxes. Individuals who itemize their deductions can claim up to $40,000 ($20,000 if married filing separately) for state and local taxes paid. This limit was increased from $10,000 ($5,000 if married filing separately). The maximum deduction is reduced for taxpayers with modified adjusted gross income over $500,000 ($250,000 if married filing separately).
See How to update withholding to account for tax law changes for 2025 | Internal Revenue Service
Below is an update on the maximum 401k contribution amounts for tax year 2025 and 2026:
For Tax Year 2025, the 401K maximum contributions are as follows:
Under 50 years old: $23,500
Ages 50-59 years old: $23,500 plus $7,500 catch-up contribution
Ages 60-63 years old: $23,500 plus $11,250 catch-up contribution
Ages 64 and older: $23,500 plus $7,500 catch-up contribution
For Tax Year 2026, the 401K maximum contributions are as follows:
Under 50 years old: $24,500
Ages 50-59 years old: $24,500 plus $8,000 catch-up contribution
Ages 60-63 years old: $24,500 plus $11,250 catch-up contribution
Ages 64 and older: $24,500 plus $8,000 catch-up contribution
These contributions are deductible for NJ purposes as well. The 401k plan is one of the only retirement plans that allows a deduction for NJ purposes.
Please see the following from the New Jersey Division of Taxation:
| 2024 Senior Freeze Payment Schedule |
| We have begun issuing 2024 Senior Freeze payments to qualified applicants as of July 15, 2025. Paper checks will continue to be issued on a rolling basis, and direct deposits started to be issued on August 1, 2025. If you filed before May 1, 2025, checks began to be issued as of July 15, 2025. If you filed between May 1 and June 1, 2025, checks will be issued beginning September 1, 2025. If you filed between June 2 and September 1, 2025, checks will be issued beginning November 1, 2025. And if you filed between September 2 and October 31, 2025, checks will be issued beginning December 1, 2025. |
This is a helpful Fact Sheet from the IRS on some tax year tax changes from the One Big Beautiful Bill (OBBB). They impact tax year 2025.
FS-2025-03, July 14, 2025
Note: This Fact Sheet has been updated July 25 by adding to the section on “No Tax on Car Loan Interest” new language describing the requirement for “Final assembly in the United States.”
Below are descriptions of new provisions from the One Big Beautiful Bill Act, signed into law on July 4, 2025, as Public Law 119-21, that go into effect for 2025.
If a qualifying vehicle loan is later refinanced, interest paid on the refinanced amount is generally eligible for the deduction.
Please see below from the NJ Division of Taxation regarding the 2024 Anchor Benefit:
We will file on behalf of most eligible New Jersey homeowners and renters under 65 and not collecting Social Security disability benefits on September 1, 2025, based on information contained in their 2021 application. We will begin sending those taxpayers their Anchor Benefit Confirmation Letter on August 13, 2025. If you receive a letter and need to change your banking information, or prefer to request a paper check, then you will have to file your own application by August 31, 2025.
If you do not receive an Anchor Benefit Confirmation Letter, you will have the opportunity to file an Application for Property Tax Relief on your own when online filing is available in mid-August.
New in 2025 – We will not be sending out mailers with ID/PIN information to file your application. Instead, all applicants must verify their identity through ID.me while using our online web application.
When applying, have your 2024 property tax details (i.e. County/Municipality Code, Block/Lot/Qualifier, tax amounts) available as well as the gross income reported on your 2024 NJ-1040.
Good information to know from the NJ Division of Taxation regarding the sales tax on tariffs:
| Sales Tax Treatment of Tariff Mark Ups |
| Tariffs are a federal tax imposed on importers when goods are imported. The imposition of tariffs could result in an increased product cost passed down to distributors, wholesalers, and, finally, the retail sellers that are responsible to collect New Jersey Sales Tax from the end user. When a seller passes along the cost of a tariff to the consumer/purchaser, the charges are subject to Sales Tax as part of the taxable sales price, even if the tariff is separately stated to the purchaser. |
See NJ Division of Taxation – Sales Tax Treatment of Tariff Mark Ups for more information.
I read the following helpful information on EV tax credits in the tax letter I subscribe to:
Source: The Kiplinger Tax Letter 5/22/2025
This chart I printed from a class I took is very helpful in determining your RMD age:
Installment Agreement Requests – If you owe taxes and cannot pay right away, these are the links for the forms to request installment agreements:
NY Payment Plan Request – See below from their website:
To make your request online:
Please see information below from the IRS about the Self-Employed Health Insurance Deduction:
The insurance plan must be established, or considered to be established, as discussed in the following bullets, under your business.
See Instructions for Form 7206 (2024) | Internal Revenue Service
Please see below from NJ Taxation:
Due to program changes, ANCHOR will now skip the 2022 and 2023 benefit years and move directly to 2024.
As per FinCEN: (See www.fincen.gov/boi)
ALERT [Updated March 26, 2025]: All entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners are now exempt from the requirement to report beneficial ownership information (BOI) to FinCEN. Existing foreign companies that must report their beneficial ownership information have at least an additional 30 days from March 26, 2025—until April 25, 2025, for most companies—to do so. For more information, see press release and alert.
As per NJ Division of Taxation:
Eligible New Jersey homeowners and renters under 65 and not collecting Social Security disability benefits may have their ANCHOR applications automatically filed when online filing becomes available in Summer 2025. If you do not receive an Auto-File Confirmation Letter, you will have the opportunity to file an Application for Property Tax Relief on your own.
Homeowners:
You are eligible if:
Renters:
You are eligible if:
Filing Deadline
October 31, 2025
Please see release below from FinCEN on the BOI reports; and at the following link: FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines | FinCEN.gov
Immediate Release
February 27, 2025
WASHINGTON––Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.
No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.
FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.
Please see update below from fincen.gov:
BOI e-Filing Alert: Please note that beneficial ownership information reporting requirements have been affected by a recent federal court order. The Department of the Treasury is appealing that order. In the meantime, reporting companies are not currently required to file a BOIR and are not subject to liability if they fail to do so while the applicable order remains in force. However, reporting companies may still opt to file a BOIR. More information is available on our website (https://www.fincen.gov/boi
Please see requirements for 2023 NJ Senior Freeze below from the NJ Division of Taxation. Also note the big increase in the income limit from prior years.
| Age/Disability | You (or your spouse/civil union partner) were:65 or older on December 31, 2022; orActually receiving federal Social Security disability benefit payments (not benefit payments received on behalf of someone else) on or before December 31, 2022. |
| Home Ownership | Homeowners. You owned and lived in your home since December 31, 2019, or earlier (and you still owned and lived in that home on December 31, 2023).Mobile Home Owners. You leased a site in a mobile home park where you placed a manufactured or mobile home that you owned since December 31, 2019, or earlier (and still lived in that home/leased the site on December 31, 2023).If you moved from one New Jersey property to another and received a reimbursement for your previous residence for the last full year you lived there, you may qualify for an exception to re-applying to the Senior Freeze Program. Visit Requirements for Resuming Eligibility for more information. |
| Property Taxes/ Site Fees | Homeowners. The 2022 property taxes due on your home must have been paid by June 1, 2023, and the 2023 property taxes must be paid by June 1, 2024.Mobile Home Owners. Your site fees must have been paid by December 31 of each year respectively. |
| Income Limit | Your total annual income (combined if you were married or in a civil union and lived in the same home) was:2022 – $150,000 or less; and 2023 – $163,050 or less See Income Limits History for past years’ income limit amounts. |
The Reporting Rule requires certain entities to file beneficial ownership information (BOI)
reports (referenced in this Guide as BOI reports or reports) to FinCEN. See BOI Small Compliance Guide v1.1 (fincen.gov) for more information. Below is some helpful deadline info.
Convenience of the Employer Sourcing Rule Enacted for Gross Income Tax:
A new law was signed July 21, 2023, that establishes a “convenience of the employer test” (convenience rule) for nonresident income sourcing. Under the convenience rule, a nonresident taxpayer’s employee compensation from a New Jersey employer for the performance of personal services is sourced to the employer’s location (New Jersey) if the employee is working from an out-of-state location for their own convenience rather than for the necessity of their employer. The new law is retroactive to January 1, 2023. Affected taxpayers must begin withholdings and/or make estimated payments for Tax Year 2023 as soon as possible. Employers should consider making adjustments to withholdings as an accommodation to employees, so that they are not underpaid. The Division will not impose penalty and interest as long as the taxpayer begins complying with the new law as of September 15, 2023.
This is a good article on Roth 401ks from Kiplinger Retirement. I invest in Roth 401k and Roth IRAs. It avoids a tax bill on the investments and gains in your retirement accounts when you begin making distributions at retirement.
If you hire a new employee that has been unemployed for 27 weeks or more and received unemployment benefits, there is a 40% credit on the first $6,000 in wages called the Work Opportunity Tax Credit. Something to think about when hiring someone new and they tell you they have been out of work for more than 6 months.
The deadline for buying health insurance on an exchange for 2016 is January 31, 2016. Without health insurance coverage, the IRS penalizes you. Please see https://www.healthcare.gov/fees/fee-for-not-being-covered/ for more information on the penalties involved.
1. Coping with Overlooked College Expenses
2. Post-Retirement Work and the Impact on Social Security, Taxes and Health Care
3. Job Search Expenses May be Deductible
4. Tax Credits That Can Help Lower College Costs
5. The Tax Effects of Divorce or Separation
6. Tax Considerations (and Advantages)
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1. COPING WITH OVERLOOKED COLLEGE EXPENSES
You know college is going to cost a lot, but are you sure you know exactly how much? Here are some of the unexpected charges you should anticipate and advice on ways to deal with them. https://www.njcpa.org/stay-informed/tax-financial/full-article/2015/08/26/coping-with-overlooked-college-expenses
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2. POST-RETIREMENT WORK AND THE IMPACT ON SOCIAL SECURITY, TAXES AND HEALTH CARE
Individuals thinking about returning to the workforce after retiring need to learn if and how Social Security benefits, health insurance and taxes will be affected so that they don’t lose benefits or end up in a higher tax bracket. https://www.njcpa.org/stay-informed/tax-financial/full-article/2015/08/26/post-retirement-work-and-the-impact-on-social-security-taxes-and-health-care
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3.
JOB SEARCH EXPENSES MAY BE DEDUCTIBLE
If you look for a job in the same line of work, you may be able to deduct some of your job search costs. Here are some key tax facts you should know about if you search for a new job. https://www.njcpa.org/stay-informed/tax-financial/full-article/2015/08/28/job-search-expenses-may-be-deductible
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4. TAX CREDITS THAT CAN HELP LOWER COLLEGE COSTS
Are you looking for ways to minimize the costs of higher education? There are some tax laws that can help lower your outlays. https://www.njcpa.org/stay-informed/tax-financial/full-article/2015/08/26/tax-credits-that-can-help-lower-college-costs
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5. THE TAX EFFECTS OF DIVORCE OR SEPARATION
Income tax may be the last thing on your mind after a divorce or separation. However, these events can have a big impact on your taxes. Here are some key tax tips to keep in mind if you get divorced or separated. https://www.njcpa.org/stay-informed/tax-financial/full-article/2015/08/24/the-tax-effects-of-divorce-or-separation
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6. TAX CONSIDERATIONS (AND ADVANTAGES) FOR SMALL BUSINESSES
Are you thinking of launching your own business? It’s critical to understand the many rules and regulations that apply to you. https://www.njcpa.org/stay-informed/tax-financial/full-article/2015/08/26/tax-considerations-(and-advantages)-for-small-businesses
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Good news for those who are blind or disabled. The States received approval the IRS to offer ABLE accounts. Nondeductible contributions of up to $14,000 per year can be made for
a person who became blind or disabled before age 26. Distributions are tax-free if used for housing, transportation, education, job training and similar expenses.
This is a good tool to use in calculating Required Minimum Distributions: http://apps.finra.org/Calcs/1/RMD
Governor Chris Christie has provided additional time for senior and disabled residents to access property tax relief benefits by extending the filing deadline for applications for the 2014 Senior Freeze (Property Tax Reimbursement Program) to October 15, 2015.
State and federal laws require that all employers report new and re-hired employees to a statewide directory within 20 days. The site for NJ is nj-newhire.com. For NY it is www.nynewhire.com.
If you receive a call from the IRS, it is probably a scam. First call the IRS at 1-800-366-4484 to confirm whether the caller is an employee of the IRS. If they are not an employee, you can file a complaint at the following link: http://www.treasury.gov/tigta/contact_report_scam.shtml
You have until February 15th to sign up for an individual policy for 2015 on the health care exchanges. Please go to healthcare.gov if you are living in New Jersey since there is no New Jersey exchange. If you are living in New York, please use the following link for the New York exchange: nystateofhealth.ny.gov
Medicare open enrollment is from October 15th until December 7th for 2015 plans. For those already on Medicare, it is a good time to review alternative plans. A good website to find Part D or Advantage plan options is https://www.medicare.gov/find-a-plan.
Estates have until December 31 to elect portability so that the unused estate and gift tax exemption passes to the surviving spouse. Please contact me if you would like to discuss further.
Don’t fall for callers claiming to be the IRS and saying you owe more taxes. The IRS never makes calls to tell taxpayers they owe more in taxes. Please call 800-366-4484 if you receive a bogus call.
Due to last year’s 16 day government shutdown, the IRS will not be processing 2013 personal returns until January 31st. The IRS started accepting business returns on January 13th.
The 2013 standard mileage rate is 56.5 cents per mile for business driving. It decreases to 56 cents per mile in 2014.
This is a good resource to help look for errors in 401(K) plans:
http://www.kiplinger.com/members/links/ktl/131220/401k_fixit_guide.pdf#!
The Supreme Court is moving closer to deciding on whether severance pay for laid off workers is subject to FICA tax. It will probably be decided in the spring.
If you want to see how your 401K plan ranks, please see the following link: BrightScope.com
This is a good tool to estimate what you will need to save every month for retirement: www.wellsfargo.com/myretirementplan You will need a Wells Fargo account to open the tool.
The IRS has launched a new and helpful Affordable Care Act tax provisions website to educate individuals and businesses. Please see http://irs.gov/aca
This is a good calculator to see if you qualify for a tax credit under the new healthcare law: www.turbotax.intuit.com/health-care
The following link has a great tool to see how different states tax retirees: http://kiplinger.com/tools/retiree_map
Under the Affordable Care Act, taxpayers will be able to get a credit to help them buy health insurance. To get the credit, household income must be between 100% and 400% of the federal poverty level. This is currently $11,490 to $45,960 for singles and $23,550 to $94,200 for a family of four. People who are eligible for Medicare or other federal insurance do not qualify for the credit.
Effective January 1, 2014, individuals must have minimum essential health insurance coverage for themselves and their dependents to avoid a tax. This includes coverage provided by employers that meet minimum federal requirements, coverage through an exchange and federal coverage such as Medicare, Medicaid, Tricare and veterans coverage. Please contact me if you would like to discuss further.
Donations to foreign charities are not deductible. Only donations to charities established under U.S. law can be deducted.
This is an interesting site to see if a state treasury has unclaimed assets in your name: missingmoney.com The search is free.
The Supreme Court has struck down the Defense of Marriage Act. Couples who get married in the District of Columbia or in the 13 states that allow same-sex marriage can now file federal income tax returns jointly. Estate planning will also be easier. Please contact me if you would like to discuss further.
Here are the links for the Health Insurance Marketplace Standard Consumer Application from cms.gov: -Individual Short Form http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/marketplace-app-short-form.pdf -Family http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/marketplace-app-standard.pdf -Individual without Financial Assistance http://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/marketplace-app-no-financial-assistance.pdf
October 1st, 2013 is open enrollment for the new state-based health insurance marketplace (exchanges) created under the 2010 health care overhaul law. The following link is helpful to see where states stand: http://kff.org/state-health-exchange-profiles/
For social security benefits, you have 12 months after first claiming benefits to file and have the application withdrawn. This way you can restart benefits later at a higher benefit amount. Please contact me if you would like to discuss further.
Treasury Form 90-22.1 (FBAR) is required to be filed if you have an interest in foreign accounts totaling more than $10,000 at any time during the year. This form is filed separately from your income tax returns. For 2013, it must be e-filed and is due June 30, 2014. Please contact me if you would like to discuss further.
For Real Estate Professionals, in order to deduct rental losses in full, you are required to spend over half your working hours and at least 750 hours per year materially involved in real estate. Please contact me if you want to discuss further.
The attached chart is an excellent resource from The Kiplinger Tax Letter. It highlights the type of retirement distributions and whether they are an exception to the 10% additional tax. Please contact me if you would like to discuss further.
For divorced parents, the noncustodial parent needs IRS Form 8332 signed by the custodial parent in order to claim children as dependents. Please contact me if you would like to discuss further.
If you filed or paid your taxes late, you may be qualified to have the IRS abate your penalty under its First Time Abate Program. You must be tax-compliant for the past 3 years. Please contact me for further information.
The social security wage base is increasing. The following are the estimates for the upcoming years: 2014 $115,800 2015 119,100 2016 123,600 2017 128,700
Some good news for Hurricane Sandy victims: The storm damage losses can be claimed on your 2011 or 2012 tax returns, whichever saves more money. Taxpayers have until October 15, 2013 to amend their 2011 returns to claim the storm damage losses. Unfortunately, NJ provides no tax benefit for the losses. Please contact me if you would like to discuss further.
For 2013, the AMT Exemptions increase to $80,750 for couples and $51,900 for singles and head of households.
The American Taxpayer Relief Act of 2012, signed January 1, 2013, did not extend the 4.2% employee social security tax. Effective 1/1/13, the employee social security tax increases from 4.2% to 6.2% for wages up to $113,700. This applies to self-employeds as well.
The taxpayer may deduct Medicare premiums paid on the front page of the 1040 if they are self-employed. Medicare premiums paid by a spouse do not count as self-employed medical insurance, deductible on the front page of the 1040, unless the spouse is also self-employed.
For gifts made by check, be sure the donee deposits it in 2012 if you want the money to count as a 2012 gift for gift tax purposes. Alternatively, deliver a certified check to the recipient this year, which will count as a 2012 gift. The 2012 annual gift exclusion is $13,000 per donee and for 2013, the annual gift tax exclusion is $14,000.
Check the balance in your flexible spending account. You must clean it out by December 31 if your employer still has not implemented the 2 1/2 month grace period that the IRS now permits. Otherwise, any money remaining in your account is forfeited. Also, for 2013, a $2,500 annual ceiling on heath flexible spending account payins goes into effect.
I recently read an article from Kiplinger about debt resolution fees. In this case, the debt resolution company saved a debtor $6,753. The tax court allowed him to deduct the $2,343 fee paid to the debt resolution company subject to the 2% limitation for miscellaneous itemized deductions.
Unter this IRS program, for many who file late or pay late, the IRS will OK a one-time waiver of the late payment and late filing penalties. The taxpayer must request relief and must be tax compliant for the past three years.
You have until 10/15/12 to undo a 2011 Roth conversion. If you filed your 2011 returns already, an amended return will have to be prepared to recover the taxes paid on the original conversion. Please contact me to find out more.
Worker’s compensation paid in lieu of Social Security benefits is taxable. An injured worker received both worker’s compensation and Social Security disability benefits. The worker’s compensation payments offset the social security benefits dollar for dollar. The worker’s compensation payment is treated just like other social security benefits: Up to 85% of the payments can be hit with income tax.
Severence payments for laid-off employees aren’t subject to FICA taxes according to an Appeal Court decision (Quality Stores, 6th Cir.). However, the IRS may appeal this decision to the Supreme Court.
Interesting tax break for Tenant-Owners of housing co-ops that do not own the land the building is on: Tenant-Owners can deduct their share of the building’s real estate taxes even though the land is leased from the owner and the Co-op constructed the building on leased land.
The 60 day rollover rule won’t apply if you inherit an IRA and the funds are first paid to you. The funds have to be transferred directly to IRA. Otherwise, the distribution is taxable.
You can deduct medicare premiums paid as health insurance on the front page of a 1040 (above-the-line) if you are a sole proprietorship, a partner in a partnership, or an S-Corporation 2%+ Shareholder.
The projected Social Security Base is as follows: 2013 $113,700 2014 $117,900 2015 $123,000 2016 $128,400
Only loans by shareholders to S-Corporations can increase their basis. Owners of S-Corporations can deduct losses only up to the amount of their investment in the company, including loans they make to the corporation. The debt must bona fide debt of the S corporation owed directly to the shareholder. Guarantors of loans to an S-Corporation do not get this break.
Congress should act soon regarding estate taxes. After 2012 if congress doesn’t act, the rules before 2001 will go into effect and the current $5.12 million estate and gift tax exemption will fall to $1 million. The maximum tax rate would also increase 20 percentage points to 55%.
Having incomplete substantiation of donations when filing nixes a deduction for the contributions, according to the Tax Court. A couple made regular gifts of $250 or more to the church that they belonged to. However, the acknowledgment from the church failed to state that no goods or services were given for the donations. After the Service denied their write-off because of the faulty acknowledgment, they got a letter from the church saying they received no benefits for the contributions. But that came far too late. The deduction was properly denied because the donors didn’t have valid substantiation in hand before filing (Durden, TC Memo. 2012-140).
The following items may cause a potentially higher risk for audit
1.Making too much money
2. Failing to report all taxable income
3. Taking large charitable deductions
4. Claiming the home office deduction
5. Claiming rental losses
6. Deducting business meals, travel and entertainment
7. Claiming 100% business use of vehicle
8. Writing off a hobby loss
9. Running a cash business
10. Failing to report a foreign bank account
11. Engaging in currency transactions
12. Taking higher than average deduction
Please contact me to discuss further