Charity Contributions

[Anarchrist]

Yes, so this community is definitely not helpful at all (most) . . . . Maybe I should of worded my question differently, but I'm a little appalled at the responses

If you're so easily offended, the internet may not be the place for you. Anyone who has passed a college tax class should know the answer to such a basic question. Anyone who has passed the SEE and is studying for the CPA should know the answer to such a basic question. Anyone who is employed in the field and has prepared 250 returns that passed review by his supervisor should know the answer to such a basic question. Yet you are appalled people are shocked by your poorly worded, detail lacking, extremely basic question.

Grow up. Take responsibility for your behavior and quit blaming everyone else.

Only one person answered my question

Numerous people asked for clarification, numerous people attempted an answer (two of which actual gave the answer you needed even though they weren't sure exactly what you were asking), and numerous people gave scenarios that could fit the OP to help provide the clarification you weren't giving.

but the responses I received were "how can you not know that." Or "what are you doing in this field, if you don't know that, then get out."

"Are you preparing returns for others for a fee?"
"Wondering the same thing"
"There was much head-shaking on my part when I read the OP."
"Again, my opinion is that if a person cannot prepare a basic return without a computer, they should not be in the business unsupervised."

Wow, look at that, not one person made the rude remarks you claim were made. They actually made rational responses to your question. Again, grow up. Stop being so easily offended and next time you're asked for clarification or people attempt to answer your vague questions, be grateful for the help and provide the asked for clarification instead of whining.

[Lion]

You got accurate answers, suggestions for where to look both in the return and in research materials (including this very TTB), and even some suggestions for what to add in your query to get even more specific answers, from TaxNJ, Spanel, Burke, KathyC2, and Rapid Robert. Do what they say, and you will either discover your own answer or you will flesh out your question with specifics that give us a chance to guide you more.

I also agree that you should continue working with your mentor to become more proficient with itemized/standard deductions and other basic topics needed for all Forms 1040, maybe before you tackle S-corporations. But, do work with your mentor as you prepare returns and don't wait until they are complete before he reviews them or else you make it harder for him to help you with any points that you found confusing during your preparation. He's getting paid to be your manager. Ask him questions. Which does not mean you should not ask questions here or on any message board. But, having a mentor onsite that you can show a document or point to a line item in a return can be a huge education.

[RWG1950]

Hey mvp2885 :
Hope you don't take the responses to your post personally.
The way it was worded made it seem a little incredulous is all.
Wish I had your credentials & education.
There is no such thing as a dumb question.
Hope you keep asking 'em - just as I do.

[spanel]

Yes, so this community is definitely not helpful at all (most). My question was in regards to if the taxpayer needs to itemize in order for any charitable contribution or mortgage interest to make a difference on his refund or tax liability. The taxpayer had written contemporaneous receipts written notices from various charities about his donations. He earned close to 180k. I just passed parts 1, 2, and 3 of the SEE, and ready to become an enrolled agent (pending IRS approval), but the responses I received were "how can you not know that." Or "what are you doing in this field, if you don't know that, then get out." Only one person answered my question, thank you Burke. I'm 100% sure when everyone first started they "knew it all." Right? I also hold a Masters degree in accounting and studying for the CPA, but it's my first time getting in to the realm of tax prep, I've done close to 250 tax returns so far this season, and have been reviewed by my direct manager and have had only 2-3 that have came back to me where I did a minor mistake, although they were not e-filed yet, so the errors were promptly corrected.

Maybe I should of worded my question differently, but I'm a little appalled at the responses, and no one knows how hard I've worked and accomplished to get to where I am, and to get responses as I did, truly made me feel "dumb." My next question is about S-corps, but being that I have to be an "expert" to ask questions around here, I am not even sure I will use this community anymore. Thanks for the few that were nice.

One would ask.. why did you not ask the person reviewing your info this question.

Also, the very nature of your original question is what lead to the answers you were given.

In the future a question like yours would be helpful.

Filing status
AGI
Total on Sch A
Total Tax

Chris

[Rapid Robert]

"Just to confirm, charitable contributions can only be used if they itemize? Does that apply to mortgage interest as well?" This question shows that the person asking it has very little actual understanding of how a tax return is prepared. I don't think you could pass basic California CTEC registration requirements without knowing the answer. As an EA, I know that simply passing the SEE only means you are good at passing tests, not that you are an experienced or even very good tax preparer.

As for this forum being "helpful", well we help those who help themselves. The fact you couldn't find the answer to your own very basic question by consulting Pub 17, or conducting trial and error with your tax software, and then come back here whining about the answers you got, which you didn't pay anyone for, does not reflect well. At the very least, you should have posted some example dollar amounts as you asked your question. As they say, garbage in, garbage out.

[kathyc2]

After seeing that you took the time to get the education and that you do have someone reviewing work, I apologize. Like Lion suggested printing out returns, studying them and understanding the math of how it all fits together will be the best learning experience you can have. Unless college accounting and CPA exam has drastically changed over the years, it will only go so far to learning the ins and outs of the 1040.

[Lion]

What do you mean by no difference? If actually itemizing, charitable donations and mortgage interest do make a difference. If taking the standard deduction, then they do not make a difference.

Try it on paper to see where the numbers flow. When you see that itemized deductions can increase the total itemized deductions but NOT increase the standard deduction, you will see that you received accurate answers in this thread.

Be aware that not all mortgage interest might be deductible, even when itemizing, due to TCJA. (Or, on prior years, due to AMT.)

And, if you have a state(s) that has decoupled from the federal, you might see the results of the two deductions you asked about on the state return(s) even when they do not help the standard deduction on the federal.

As a mother, I suggest you be nice to us if you want us to help you.

[mvp2885]

Yes, so this community is definitely not helpful at all (most). My question was in regards to if the taxpayer needs to itemize in order for any charitable contribution or mortgage interest to make a difference on his refund or tax liability. The taxpayer had written contemporaneous receipts written notices from various charities about his donations. He earned close to 180k. I just passed parts 1, 2, and 3 of the SEE, and ready to become an enrolled agent (pending IRS approval), but the responses I received were "how can you not know that." Or "what are you doing in this field, if you don't know that, then get out." Only one person answered my question, thank you Burke. I'm 100% sure when everyone first started they "knew it all." Right? I also hold a Masters degree in accounting and studying for the CPA, but it's my first time getting in to the realm of tax prep, I've done close to 250 tax returns so far this season, and have been reviewed by my direct manager and have had only 2-3 that have came back to me where I did a minor mistake, although they were not e-filed yet, so the errors were promptly corrected.

Maybe I should of worded my question differently, but I'm a little appalled at the responses, and no one knows how hard I've worked and accomplished to get to where I am, and to get responses as I did, truly made me feel "dumb." My next question is about S-corps, but being that I have to be an "expert" to ask questions around here, I am not even sure I will use this community anymore. Thanks for the few that were nice.

[RWG1950]

Most professions these days are regulated in some manner and involve required education, training, licensure and ongoing CE.
A tax return is a significant document in people's lives, although many people do not think of it this way - they just look for the refund.
To allow anyone to hang out a shingle for income tax preparation without testing for at least minimal competence is just not a good idea.
Sitting in a CE classroom each year, passively listening (or maybe not) to instruction is not the same as demonstrating minimal competence
Had thought the RTRP testing was a good idea. Sorry to see it was struck down. Couldn't understand why. Hope they can bring it back.

[Burke]

Yeah, good point. This is probably a situation where someone who earns $33,333.00 decided to donate $20,000 to charity.

Not as uncommon as you might think. I have a client whose retirement income is moderate, but he is wealthy with assets and contributes heavily to charity. He exceeds the 50% threshold every year and has had carryovers for all the years I have done his return. Maybe this increase to 60% will free up some of those. I have tried to get him to directly contribute his RMD's both to reduce the reportable income (and tax due) on his return and keep the charitable carryovers from increasing so much.

[Dude]

Charitable deductions are also limited to 60% (formerly 50%) of AGI (there are more rules for different types of contribs). So that could be a factor. As for the OP, the reference to mortgage interest seems garbled, at least it makes no sense to me. If one is going to ask a question here, they should at least (try to) ask it clearly. Giving some example numbers that illustrate the question is often quite helpful to see what the confusion or question really is.

Yeah, good point. This is probably a situation where someone who earns $33,333.00 decided to donate $20,000 to charity.

[Rapid Robert]

Charitable deductions are also limited to 60% (formerly 50%) of AGI (there are more rules for different types of contribs). So that could be a factor. As for the OP, the reference to mortgage interest seems garbled, at least it makes no sense to me. If one is going to ask a question here, they should at least (try to) ask it clearly. Giving some example numbers that illustrate the question is often quite helpful to see what the confusion or question really is.

[kathyc2]

i understand this is a new preparer and even us old timers don't know everything. However, not understanding why a charitable donation or mortgage interest does not change the refund is extremely basic. I certainly wouldn't want a "mechanic" working on my car if they have to go online and ask how to drain the oil. Same concept here. I can not understand why someone would take on someone's finances if they are not qualified to do so. Since Congress or most states refuse to require preparers to prove even a basic understanding of preparation to be a tax preparer, I guess we are left with caveat emptor. Again, my opinion is that if a person cannot prepare a basic return without a computer, they should not be in the business unsupervised.

[TAXNJ]

The Original Poster is new to the Forum and looking for suggestions/recommendations for reference material.

Many Posters and Reply Posters were in that position and still today ask for suggestions/recommendations for reference material.

To the Original Poster, keep getting familiar with the area of taxation and don't get disappointed. The TaxBook "Deluxe Edition Plus" is a great tool for reference.

[kathyc2]

Wondering the same thing... This is basic tax return knowledge. Filing Status? Total Tax before you put the contributions in? Total itemizations before and after contributions?

Chris

May be my age is showing, but I don't think anyone who can not calculate a basic return (w-2's, non CG rate investments, itemized deductions) with a calculator, pencil and paper has no business in holding themselves out to the public as a tax professional. If a person could do that they would easily know that "entering" the 20K charity with no change to refund means either Sch A total is still under standard deduction, or liability was already zero with standard deduction.

I fear we are going to have a generation of "tax preparers" who will become as dependent on software as teenagers working fast food that can not make change without the aid of a cash register.