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Pro tip: Ask your church for a year-end giving statement in January! This makes tax time so much easier if you're itemizing. Mine breaks down weekly giving by date and gives the total for the year with the church's tax ID number and everything. Also, remember that if you donate by check or credit card in late December 2024 but the church doesn't actually receive or process it until January 2025, it still counts for your 2024 taxes (the year you initiated the donation). This can be helpful if you're trying to get over the itemization threshold.
Does this apply to online donations too? Like if I donate through the church website on Dec 31st but they don't process it until January?
Yes, it absolutely applies to online donations too! The IRS considers the donation made when the transaction is initiated for credit card and electronic payments. So a donation made through your church's website on December 31st counts for that tax year, even if the church doesn't process it until January. Just make sure you have confirmation of the transaction date. Most church online giving systems send an email receipt showing the date you made the donation, which is perfect documentation for tax purposes.
Don't forget that tithes and offerings aren't the only church-related expenses that can be deductible! If you drive as a volunteer (like delivering meals for church outreach or driving for youth events), you can deduct mileage at the charitable rate (14 cents per mile I think). Also, if you buy supplies for church activities and aren't reimbursed, those count too.
Is that charitable mileage deduction separate from the standard deduction? Or would I still need to be itemizing to claim it?
I'm wondering if anyone knows if the software matters for this situation? I use FreeTaxUSA and it seems like it wants me to complete both returns together. Is there a way to just file the state through them while saving the federal as a draft until October?
With FreeTaxUSA, you can absolutely do this! Complete both your federal and state returns in the software, but when you get to the filing stage, only select to e-file your state return. There should be an option to "file state only" somewhere in the filing process. For your federal, make sure you fill out and submit Form 4868 for the extension and pay your estimated amount owed. You can either generate this form through FreeTaxUSA or use the IRS direct pay website to make the payment, which automatically gives you the extension.
Just to add another perspective - I did exactly this last year with H&R Block software. Completed both returns, filed for federal extension + made payment, and filed state right away. Got my state refund in about 3 weeks while taking my time to finalize some complicated deductions on my federal return. The only hiccup was that I did have to amend my state return later because I found additional deductions that changed my federal AGI by a significant amount, which affected my state calculations. So just be aware that if your federal numbers change substantially when you finalize in October, you might need to amend your state return.
Don't overlook getting your PTIN (Preparer Tax Identification Number) from the IRS right away - it's required for anyone who prepares returns for compensation. It's an easy online application. One approach I don't see mentioned yet is volunteering with VITA (Volunteer Income Tax Assistance) program. It's how I started. They provide free training, and you get real experience preparing returns for low-income families under supervision. Great way to learn while helping people, and it looks good on a resume!
I hadn't heard about VITA before. Do they accept complete beginners or do I need some basic knowledge first? And is the training comprehensive enough that I could actually use it to get hired somewhere afterward?
VITA absolutely accepts complete beginners! They provide all the training you need to get started, usually beginning with basic returns and gradually introducing more complex situations as you gain confidence. The training is definitely comprehensive enough to help with employment prospects. Many tax offices view VITA experience very favorably because it demonstrates both technical knowledge and client interaction skills. It's not just about learning the forms - you develop experience explaining tax concepts to clients and solving real-world tax situations. Plus, you'll have verifiable experience you can put on your resume. Several people I trained with at VITA went on to get hired at tax firms or even start their own tax businesses.
Something I learned the hard way: don't waste money on expensive software right away. Most tax pros use professional software like ProSeries, Drake, or Lacerte, but they cost hundreds or thousands of dollars. Start with the free fillable forms from the IRS website to learn the actual forms and calculations. Then consider TaxAct Professional or TaxSlayer Pro which have lower entry costs. As your client base grows, you can upgrade to the premium options.
This is great advice. I spent way too much on pro software my first year only to realize I didn't even know how to use all its features. Which one would you recommend for someone just starting out who wants room to grow?
Have you tried reaching out to your state's nonprofit association? Many of them maintain lists of auditors who specialize in government grants and Single Audits. I work at a theater that received an SVOG grant last year, and our state arts council actually had a whole resource list of CPAs familiar with Title 2, Subtitle A, Chapter II, Part 200, Subpart F requirements. Also, don't forget that the SVOG audit deadline can be extended in some cases if you're making good-faith efforts to comply but struggling to find a qualified auditor. Document all your attempts to find someone - this could help if you need to request additional time.
That's a great suggestion about the state nonprofit association - I hadn't considered that angle. Do you know if the extension request needs to be submitted in a specific format or to a particular office at the SBA?
The extension request should be submitted through your SVOG portal account under "Correspondence." Include a detailed explanation of your efforts to secure an auditor (with dates and names of firms contacted) and specify how much additional time you need. Be sure to mention that you're specifically struggling to find auditors familiar with Title 2, Subtitle A, Chapter II, Part 200, Subpart F requirements for SVOG grants. Don't wait until the last minute to request this - submit at least 30 days before your deadline if possible. In my experience, the SBA has been reasonable about extensions when you show you're actively trying to comply.
Friendly reminder that if your SVOG was exactly $250,000 (not over), you can opt for the simplified compliance requirement instead of a full Single Audit. Check your exact grant amount! The rules in Title 2, Subtitle A, Chapter II, Part 200, Subpart F have that threshold exactly at $250K. A lot of venues miss this and go through unnecessary stress trying to find specialized auditors when they might qualify for the simplified approach. I initially thought I needed the full audit but realized my grant was exactly at the threshold, which saved me thousands.
Is that threshold based on the actual awarded amount or the amount spent? My SVOG was for $265k but I only ended up using $248k of it and returned the rest. Not sure if that changes anything regarding the Single Audit requirement.
The threshold is based on the amount expended during your fiscal year, not the amount awarded. So if you only spent $248k of your SVOG funds, you would fall under the $250k threshold and could opt for the simplified compliance audit instead of the full Single Audit requirements outlined in Title 2, Subtitle A, Chapter II, Part 200, Subpart F. Make sure you have proper documentation showing exactly how much was spent and when. This distinction has saved several venue operators a lot of time and money, so it's definitely worth confirming your exact expenditure amount!
Anastasia Romanov
Something similar happened to us last year. What we ended up doing was looking up the daycare's business license through the county records office online. Most licensed daycares have their business information registered publicly, including their EIN in some cases. Might be worth checking if your county has online business records.
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StellarSurfer
ā¢That's a brilliant idea! Do you need the actual physical address to search county records? The daycare my kids went to operated under a different name than what was on the building (it was like "Sunshine Learning" but the business name was something completely different).
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Anastasia Romanov
ā¢You usually just need the business name to search county records, though having the address helps narrow things down if there are multiple businesses with similar names. If the name on the building was different from their legal business name, try searching both. You can also try searching by the address itself, as most county business license databases allow searching by location too. Some counties even have map-based interfaces where you can click on the property and see what businesses are registered there. It's worth checking your state's Secretary of State business entity search as well, which often contains EINs for registered businesses.
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Sean Kelly
Just a quick warning - be careful with daycares that shut down suddenly like this. We had a similar situation and it turned out the owner was being investigated for tax fraud. Make sure you keep ALL your receipts and documentation showing you paid them. If they weren't reporting income or paying taxes, there's a small chance this could come back to haunt you if there's ever an investigation.
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Zara Malik
ā¢Oh no, that sounds scary. Did you end up having any issues with your own taxes after that happened? I'm in a similar boat with a daycare that just vanished overnight.
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