Insurance Deductibles

Frequently, small claims can prompt your insurance company to drop you at renewal time or raise your premiums. So, paying for small losses yourself saves substantial amounts in the long run. If you are unlikely to turn in a claim for a $500 loss or even $1,000 loss, raise your deductibles to reflect the point where you would report a claim.

Safekeeping of Records

You should keep copies of personal and business records away from the originals in a safe deposit box or other secure location. Items kept in the home should be kept well organized and in a container easy to transport in case of an emergency.

Requirements for Charitable Donations

Charitable contributions of any amount are not deductible unless you have a proper receipt. Proper receipt defined:  A proper receipt consist of a receipt, letter or other written communication from the charity showing the name of the charity, the date and the amount of the contribution.  If you received goods or services in return for the contribution, the receipt must include a description and an estimate of the value of the goods or services received in return for the contribution.  If the goods or services received consist solely of intangible religious benefits, the receipt must include a statement to that effect.  The receipt must be obtained by the date the return is filed, including extensions.  There have been recent court cases where the courts have disallowed significant deductions for charitable contributions where the taxpayers did not have a proper documentation. Please be sure to keep the records indicated below for future donations so you can deduct them in years when you itemize.

Contributions Made in Cash: The law requires that you have a proper receipt (see above) documenting all charitable contributions made in cash.  Cash donations without a receipt are NOT deductible.

Contributions Made by Check, Debit Card, or Charge Card or by Phone or Text message: For charitable contributions made by check, the law requires that you either have a receipt or a copy of the cancelled check, or some other bank record (e.g., a bank statement). For contributions made by debit card or by charge card, you are required to either have a proper receipt or a bank record (e.g., a bank statement, credit card statement, etc.).  For contributions made by phone or text message, you are required to either have a proper receipt or a telephone bill showing the name, date and amount of the contribution made.  Please see additional requirements below if the contribution is $250 or more.

Contributions of $250 or More per Charitable Gift: For all charitable contributions by individuals of $250 or more (contributions of cash, by check, by debit or credit card, by phone or text message, or payroll deduction), the law requires a proper receipt from the charity.

Contributions by Payroll Deductions:  if you make a contribution by payroll deduction, you must keep a pay stub, Form W-2 or other document provided by your employer showing date and amount, and you must keep a pledge card or other document prepared by the qualified organization showing the name of the organization.  If your employer withheld $250 or more from a single paycheck you must also have a proper receipt.

Contributions of Vehicles, Boats, Or Airplanes of More than $500: If you are claiming a deduction of more than $500 for a vehicle, a boat, or an airplane you contributed to charity, the law requires that you obtain a Form 1098-C or other written acknowledgement containing the same information shown on Form 1098-C from the charity in order to deduct your contribution.

Contributions of Clothing or Household Items: Generally, a deduction is not allowed for a charitable contribution of clothing or household items unless the items are in good used condition or better. Household items generally include furniture, furnishings, electronics, appliances, linens, and other similar items. For donations of this type, the law requires a receipt (written acknowledgement) from the charity stating the name and address of the charity, and a description of the item(s) donated. It must also state whether goods or services were received in return for the contribution.

Collecting Vital Information

You should consider organizing information such as: passwords to critical files, accounts, etc.; location of insurance policies; deeds; birth certificates; credit and bank card information (in case stolen) etc. into a document that can be accessed in an emergency and/or shared with those who may need the information. Please visit and click on Resources/Vital Information Collection Checklist. There you will find a sample worksheet to use to gather this information. It is imperative once the worksheet is completed to inform someone where to find it. This could be a spouse, child, parent, etc. Also, consider asking your parent(s), children or other such individuals who may need your assistance in an emergency, to complete a worksheet as well, attaching any useful information and either return the list to you or secure it in a designated place so you'll know where the information is when needed. If you have compiled such information in the past, you may need to review and update the information.

Record Retention Schedule

Generally, you should keep income tax returns indefinitely and the supporting records for seven years. We will be glad to provide a retention schedule at your request or you can find it on our website,, at Resources/Record Retention Schedule. Except in cases of fraud or substantial understatements of income, the IRS can only assess tax within three years after a return is filed. The assessment period is extended to six years if more than 25% of gross income is omitted from a return. In the case of fraud, there is NO statute of limitation. In addition, the assessment period does not begin to run until a return is filed. Proof of filing should be retained with your records.

Security Freeze

A security freeze stops credit bureaus from releasing any information about you to new creditors without your approval, which can stop identity thieves from getting new credit in your name. This is a good option if you do not apply for credit very often. For additional information on this, visit The process to unlock the freeze in order for you to apply for credit is typically minimal. All NC residents can get a security freeze free online.

Free Credit Reports

One of the best ways to protect yourself against Identity theft is to check your credit reports. If you discover something suspicious like a credit card you don't have or purchase you didn't make, it could mean you're a victim of ID theft. You can obtain a free copy of your credit report from each of the three nationwide credit bureaus (Equifax, Experian and TransUnion) once a year. To get your free report, go to or call 1-877-322-8228. To better monitor your credit year-round, you can ask for a free report from a different bureau every four months.

Setting Secure Passwords

Password security continues to increase in importance with identity theft on the rise and computer technology changing so rapidly. When setting passwords, consider using one of each of the four character types in order to increase your security: capital letter, lower case letter, number and symbol. Using a variety of these types as well as using a longer string of them, helps to increase the security of your password. Avoid using words or names and numbers that are easy to guess or somehow associated with you, such as your zip code. Instead, try using acronyms that are personal to you, but that someone else would not easily guess. For example, the password BiMfs678$ could represent "Belk is Mary's favorite store 678$". Also, remember to change passwords periodically. The beginning of the month, or beginning of the quarter is a good time to remember to change them.

Emails from IRS - Phishing Scam

The IRS does NOT send emails. You may receive emails that appear to be legitimate emails from the IRS. You should delete these immediately as they are phishing schemes.

Dependent Care Flexible Spending Accounts

If your company has a "cafeteria plan" that allows employees to designate up to $5,000 of their wages as related to child-care, we suggest you consider participating. The child care plan works as follows: You designate a portion of your wages to be deducted and held in an account on your behalf. You then submit expenses to this for reimbursement. Benefit: The amounts spent for child-care up to $5,000 are treated as nontaxable, for Federal, State and FICA purposes, which saves much more in taxes than the benefit you currently receive from the child care credit. When making the election to use the benefit, determine how much of the $5,000 to elect since unspent amounts are forfeited.

Exceptions to Early Distribution Penalties

The IRS allows penalty-free withdrawals from IRAs and qualified plans in certain circumstances. These withdrawals will still be subject to income tax, however, the 10% early withdrawal penalty may be waived. For a list of these exceptions, please go to and search for early withdrawal exceptions.

Avoid Surprises by Getting Your Info in Early

We suggest you get your information to us early in tax season so we can prepare your returns well before April 15th. If a refund is due, you will receive it sooner. If tax is due, you will have plenty of time to accumulate any additional cash needed by April 15th.

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