Maximizing Tax Benefits for Fundraisers: Tips from a Tax Consultant

[byrd1956]

I need to keep track of the reduced commission amount on a fund-raiser and claim it on taxes. She said it is a donation when you do not get your full commission. Has anyone else heard this?

 

[wadesgirl]

Interesting thought!

 

[Sheila]

Hmmm ... seems like it would be questionable since you are not the one handing them the money. PC is out more cash on a fundraiser, so my bet is they are already claiming the donation. If PC is already claiming it as a deduction, you wouldn't be able to claim it too.

 

[pcsharon1]

It's not really reduced commission. It is the commission that we earn on a Fundraiser and it's the same for everybody. It simply is what the commission is. It would be like getting paid $10 an hour if you work the dry cleaning machine at a dry cleaners and $12 an hour if you work the iron - the $10 isn't a reduced wage, it simply is the wage for the job you were doing at the time.

 

[maldvs]

What about if you gave part of your commission to the fundraiser when they hit a certain amount? I am doing a fundraiser right now and have said if they get to $600 then I will give them 5% of my commission.

 

[lt1jane]

That I keep track of as a donation to the organization because that's what it is. MY donation to the organization.

 

[maldvs]

That I keep track of as a donation to the organization because that's what it is. MY donation to the organization.

Ok, that's what I was thinking of as well. Thanks!

 

[Sheila]

Yes, anything that you write a check for in the way of donations, definitely claim!

 

[byrd1956]

Thank you to everyone that commented. I didn't know what to think when she said it. I've never really done a good job of keeping track of any extra donations I do, except for a few large item products. It makes sense that PC would be claiming this, too.

 

[3girls]

make sure you keep a copy of your cancelled check and put it in a folder for your taxes....I keep a manila envelope right by my computer and put all important tax docs in it right away so that when it comes to tax time I already have a copy...I may right some notes on the back of the paper though....good luck!

 

[Jennie4PC]

I would check with your tax guys. I have had 2 different tax people tell me the only way to claim what you give from a fundraiser is has to be a company that is non profit . Ex if you did a fundraiser for a dance comapny you cannot claim that money since they are for profit.

 

[pampered1224]

bryd1956 - she is wrong. Here's why I know this. We own a duplex. We rent out an upper flat. If we do not collect the entire rent for some reason, we do write off the difference. We are not donating it to our tenant. We are not writing her a check. We are taking a loss based on the agreed upon amount. The reason she is wrong: you know ahead of time you will only make 15% or 17% commission. It was an agreed upon amount when you signed. The only way to claim it as a loss is if it occurs for an unforeseen reason. There is no unforeseen reason in this case. And because I too asked H&R block and the IRS directly. They both too said nope.
You could let her do it and that would be that. But if you get audited, she dang well better be there when you are.

 

[byrd1956]

bryd1956 - she is wrong. Here's why I know this. We own a duplex. We rent out an upper flat. If we do not collect the entire rent for some reason, we do write off the difference. We are not donating it to our tenant. We are not writing her a check. We are taking a loss based on the agreed upon amount. The reason she is wrong: you know ahead of time you will only make 15% or 17% commission. It was an agreed upon amount when you signed. The only way to claim it as a loss is if it occurs for an unforeseen reason. There is no unforeseen reason in this case. And because I too asked H&R block and the IRS directly. They both too said nope.
You could let her do it and that would be that. But if you get audited, she dang well better be there when you are.

John, Thank you. We didn't do this. She was talking about the future, but I will remember what you said.

 

[kvossy]

Simple enough... you need to claim what ever you make and whatever you spend. If PC pays you commission, that's income. If you had someone else money that's an expense.

 

[flemings99]

My H&R Block person says to claim the $2 insurance deduction they take out of our ck. Don't know if that is accurate or not, but what I've been told.

 

[pampered1224]

Strangely enough that is correct but I too keep forgetting to do it. $24 is $24 when it comes to an expense. I am pretty sure sure there is an Insurance paid expense. I also did soemthing else I forgot about in the past. I paid H&R Block $421 to prepare my taxes in April 2011 for 2010. When HE does it, he subtracts only the actual cost of the paper work which usually comes out to about $75. So I wrote off the rest as an office expense! I sure as heck would not be paying so much to have my taxes done if it were not for my business! Why should I have to eat it!

 

[wadesgirl]

Strangely enough that is correct but I too keep forgetting to do it. $24 is $24 when it comes to an expense. I am pretty sure sure there is an Insurance paid expense. I also did soemthing else I forgot about in the past. I paid H&R Block $421 to prepare my taxes in April 2011 for 2010. When HE does it, he subtracts only the actual cost of the paper work which usually comes out to about $75. So I wrote off the rest as an office expense! I sure as heck would not be paying so much to have my taxes done if it were not for my business! Why should I have to eat it!

Holy cow! I have a personal tax guy do mine and he charges only $110 - and I thought that was a lot!!

 

[pampered1224]

Well I think I got the hang of the Schedule C and will probably never have H&R Block do them ever again. I only have business write offs so I do not have any other deductions coming. I do not itemize. I know, isn't that ridiculous? And here I thought I was doing the safe thing by paying so much. Guess what? I WAS NUTS! (I still am but not in that respect any more!)

 

[flemings99]

Well I think I got the hang of the Schedule C and will probably never have H&R Block do them ever again. I only have business write offs so I do not have any other deductions coming. I do not itemize. I know, isn't that ridiculous? And here I thought I was doing the safe thing by paying so much. Guess what? I WAS NUTS! (I still am but not in that respect any more!)

We pay them big $$ every year too. Every year it goes up. This yr. it was 535!! It's tough to hand it over but I do like that they have the peace of mind program where they pay for fees if you are audited and they did it wrong. Of course the difference of several hundred over the years could add up. Maybe I'll look into other options next yr.

 

[esavvymom]

Just so you know, I know Turbo Tax does have an audit protection, that should you get audited, they will help you? It cost $40. I dont remember what they cover.....obviously a program error, but YOUR error, not sure. i am sure the company website would show it somewhere.


We stopped using HR Block after WE had to tell them exactly what deductions to include...all he did was enter it! No questions asked of us about our life (ie, school, interest on mortgage, property taxes, charity, etc...the basics!). At least Turbo Tax asks us all of those things and more.

 

[andi330]

make sure you keep a copy of your cancelled check and put it in a folder for your taxes....I keep a manila envelope right by my computer and put all important tax docs in it right away so that when it comes to tax time I already have a copy...I may right some notes on the back of the paper though....good luck!

A cancelled check is not considered sufficient proof of donation for tax purposes. You need to have an actual receipt from the qualified non-profit organization. Years ago, you could use just a cancelled check, but it is no longer considered sufficient if you get audited.