A Gentle Reminder About Donations
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- Uranium
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A Gentle Reminder About Donations
Our worthy Administrator,and this site's founder,Greg Miller,has been
characteristically reticent about even mentioning our responsibilities
in this matter.
For him to be able to provide all the functional capacity that we've come
to expect,and keep the site free to all,it's necessary that those of us who
have the means (and are so inclined)continue to remit our annual
payments.
Enough said,
David
characteristically reticent about even mentioning our responsibilities
in this matter.
For him to be able to provide all the functional capacity that we've come
to expect,and keep the site free to all,it's necessary that those of us who
have the means (and are so inclined)continue to remit our annual
payments.
Enough said,
David
Status, Greg?
Greg -
Where are we at with this? Is there enough money to cover costs? You haven't updated the donation page in a year and a half, and I would hate to see this site go down like it did a couple of years ago due to lack of funds. That is how we got the donation thing going! Please let us know!
Thanks,
Tim
Where are we at with this? Is there enough money to cover costs? You haven't updated the donation page in a year and a half, and I would hate to see this site go down like it did a couple of years ago due to lack of funds. That is how we got the donation thing going! Please let us know!
Thanks,
Tim
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- Uranium
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- Posts: 50
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- Location: Weaverville NC USA
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Tax Matters
I wonder if donations to the site are charitable deductions for US and State income tax purposes. If they're not, I wonder if we have among our membership a tax lawyer who would be willing to donate the service of filing the necessary paperwork with the IRS and the relevant offices (usually the Secretary of State and taxing agency) of the state in which Greg resides. There would be annual paperwork as well, but I am an Enrolled Agent (licensed to practice before the IRS) and qualified to prepare (and sign as paid preparer) the annual paperwork. I would be willing to donate my services, but I am not a tax attorney and in my opinion we would need one to get things off on the right foot. (Mechanically, I would have to be paid and report the pay in order to sign as paid preparer, but I would donate my pay back to the site. The Tax Attorney would have to get a similar deal.)
It seems obvious to me that people could afford to donate more if they could avoid taxing themselves on the money they donated. We could perhaps call the charity "The Destitute Corresponcence Chessplayer Sinking Fund".
It seems obvious to me that people could afford to donate more if they could avoid taxing themselves on the money they donated. We could perhaps call the charity "The Destitute Corresponcence Chessplayer Sinking Fund".
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- Uranium
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- Joined: Fri Nov 26, 1999 1:31 pm
The payments are Not tax-deductible.
We are paying for a service being provided to ourselves...period!
If Greg were to bother going to the trouble and expense of setting
up the operation as a business(hardly likely),he would be able to
take a deduction for the shortfall between his costs and the revenue
he receives from the relative handful of site members who seem to
be contributing.
We are paying for a service being provided to ourselves...period!
If Greg were to bother going to the trouble and expense of setting
up the operation as a business(hardly likely),he would be able to
take a deduction for the shortfall between his costs and the revenue
he receives from the relative handful of site members who seem to
be contributing.
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You have to view it in the same way as the following:
If Greg buys us a round of beer collectively, which we repay him afterwards, Greg doesn't have to start a business to keep things legal as the tax money will be collected through the bartender.
Though if Greg asked additional payment for the energy he put into creating and maintaining this site, that would be a different story.
As the membership is free and open to all without even the request of returning the pay for the beer, I do believe charity or gift might be worth looking into. (I wouldn't know the tax rules in the US at this)
If Greg buys us a round of beer collectively, which we repay him afterwards, Greg doesn't have to start a business to keep things legal as the tax money will be collected through the bartender.
Though if Greg asked additional payment for the energy he put into creating and maintaining this site, that would be a different story.
As the membership is free and open to all without even the request of returning the pay for the beer, I do believe charity or gift might be worth looking into. (I wouldn't know the tax rules in the US at this)
to mail do not "mail" too
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- Uranium
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Perhaps our use of the word *Donation* is responsible for any confusion
regarding the tax-deductibility of the payments we make to Greg.
At the risk of being redundant, I reiterate(and with absolute certainty!)
that in the U.S. they are NOT.
Furthermore,I would argue that any member paying 10,20,or 30
dollars a year who is concerned about the tax-deductibility of his
payment is probably worrying about very little since his/her
tax bracket is either non-existent or too low to have mattered
much anyway.
regarding the tax-deductibility of the payments we make to Greg.
At the risk of being redundant, I reiterate(and with absolute certainty!)
that in the U.S. they are NOT.
Furthermore,I would argue that any member paying 10,20,or 30
dollars a year who is concerned about the tax-deductibility of his
payment is probably worrying about very little since his/her
tax bracket is either non-existent or too low to have mattered
much anyway.
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Tax Matters
David, I agree with you that at present the donations are NOT tax deductible. There is also nothing immoral or fraudulent about what Greg is doing, but he may be setting himself up for tax problems anyway.
Greg should report the donations as hobby income on the last income line of his 1040. (I don't recall whether he may use 1040A. I do know that he may not use 1040EZ.) If he itemizes, he may deduct his expenses, but only up to the amount of the income, as miscellaneous deductions subject to the 2% of AGI limitation. If he doesn't itemize, or his allowed miscellaneous deductions do not get over the hump, his hobby expenses are irrrelevant for tax purposes. He may not file the site as a business because his motivation is not profit and he has no realistic, well-founded expectation of making a profit. If he had more money, he could argue about his motivation and expectation. But if he's just a normal guy, he's stuck with the way I just laid it out.
The key reason that Greg could register the site as a charity and let players make deductible gifts is that people can and do play without paying. If the donors were given special privileges not allowed to the others, then the site could not be a charity. Thus the example of the people sharing beer in a bar is not at all to the point. The problem is that before the site can be a charity, Greg must incorporate it under the laws of his home state, and the corporation must file with the IRS as a Charity under Internal Revenue Code Section 501(c) (3). In my opinion, a tax attorney should file the incorporation papers with the state and flie the corporation as a charity. However, for each subsequent year, there will need to be filings with the Secretary of State and Revenue Department of Greg's home state and the IRS. I would guess that there must be a tax attorney in our midst who would do the initial stuff for free, and I would be willing and able to take care of the subsequent stuff for free.
By the way, I stated in my first post in this thread that I am an Enrolled Agent. This means that I can represent persons (natural and otherwise) in front of the IRS and the various State and Local Income Taxing Agencies. I was granted that certification by the IRS in 1997 after I passed the twelve hour "Special Examination" covering all aspects of the tax code and IRS procedures, passed an FBI Investigation of my "background, character, and general mode of living" and opened all of my previous Federal Returns to examination. Since that time, I have done at least sixteen hours of continuing education each year. I am not the most high powered EA in the world and I am certainly not a CPA or a Tax Attorney. I would be interested in knowing the extent of your background as a tax professional. If you are not a tax professional, you cannot expect the tax laws of the US to make sense. They only make sense when you know the stories behind each provision. They do not make sense from the standpoint of common sense fairness and decency.
Greg should report the donations as hobby income on the last income line of his 1040. (I don't recall whether he may use 1040A. I do know that he may not use 1040EZ.) If he itemizes, he may deduct his expenses, but only up to the amount of the income, as miscellaneous deductions subject to the 2% of AGI limitation. If he doesn't itemize, or his allowed miscellaneous deductions do not get over the hump, his hobby expenses are irrrelevant for tax purposes. He may not file the site as a business because his motivation is not profit and he has no realistic, well-founded expectation of making a profit. If he had more money, he could argue about his motivation and expectation. But if he's just a normal guy, he's stuck with the way I just laid it out.
The key reason that Greg could register the site as a charity and let players make deductible gifts is that people can and do play without paying. If the donors were given special privileges not allowed to the others, then the site could not be a charity. Thus the example of the people sharing beer in a bar is not at all to the point. The problem is that before the site can be a charity, Greg must incorporate it under the laws of his home state, and the corporation must file with the IRS as a Charity under Internal Revenue Code Section 501(c) (3). In my opinion, a tax attorney should file the incorporation papers with the state and flie the corporation as a charity. However, for each subsequent year, there will need to be filings with the Secretary of State and Revenue Department of Greg's home state and the IRS. I would guess that there must be a tax attorney in our midst who would do the initial stuff for free, and I would be willing and able to take care of the subsequent stuff for free.
By the way, I stated in my first post in this thread that I am an Enrolled Agent. This means that I can represent persons (natural and otherwise) in front of the IRS and the various State and Local Income Taxing Agencies. I was granted that certification by the IRS in 1997 after I passed the twelve hour "Special Examination" covering all aspects of the tax code and IRS procedures, passed an FBI Investigation of my "background, character, and general mode of living" and opened all of my previous Federal Returns to examination. Since that time, I have done at least sixteen hours of continuing education each year. I am not the most high powered EA in the world and I am certainly not a CPA or a Tax Attorney. I would be interested in knowing the extent of your background as a tax professional. If you are not a tax professional, you cannot expect the tax laws of the US to make sense. They only make sense when you know the stories behind each provision. They do not make sense from the standpoint of common sense fairness and decency.
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- Uranium
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- Joined: Fri Nov 26, 1999 1:31 pm
My god,man! How you go on.
You would have Greg reporting on his tax return non-deductible
gifts aggregating less than $1,000 a year when every member
on this site could gift him individually thousands of dollars each
year without him being required by tax law to evidence one penny
of it on his tax return.
You would have him incorporating the site in the state of Indiana
as a charitable corp.on the grounds that many of the site's members
are receiving benefits free of any payment whatsoever regardless
of their ability to pay if they were so inclined...preposterous!!!
You ask my credentials: for nearly 38 yrs. I've been a professional
tax payer(at least that's what it's sometimes felt like) and for all
of that time have received the guidance and advice of high-powered
tax attorneys maintained on retainer;until very recently I've been
an uncompensated director of a New York charitable foundation.
With all due respect I offer you some words from Alexander Pope
A little learning is a dang'rous thing;
Drink deep,or taste not the Pierian spring;
There shallow draughts intoxicate the brain,
And drinking largely sobers us again.
You would have Greg reporting on his tax return non-deductible
gifts aggregating less than $1,000 a year when every member
on this site could gift him individually thousands of dollars each
year without him being required by tax law to evidence one penny
of it on his tax return.
You would have him incorporating the site in the state of Indiana
as a charitable corp.on the grounds that many of the site's members
are receiving benefits free of any payment whatsoever regardless
of their ability to pay if they were so inclined...preposterous!!!
You ask my credentials: for nearly 38 yrs. I've been a professional
tax payer(at least that's what it's sometimes felt like) and for all
of that time have received the guidance and advice of high-powered
tax attorneys maintained on retainer;until very recently I've been
an uncompensated director of a New York charitable foundation.
With all due respect I offer you some words from Alexander Pope
A little learning is a dang'rous thing;
Drink deep,or taste not the Pierian spring;
There shallow draughts intoxicate the brain,
And drinking largely sobers us again.
Bottom line: when I buy anything over the Internet, I do not expect a tax break. Because the word happens to be 'DONATION' and not 'PURCHASE' should not make a big deal.
Mathematically, 30 dollars a year (the highest suggested donation) is less than a dime a day, less than your daily Tim Hortons or Starbucks coffee. Most people aren't having there backs broken over a dime, and if even if money is really tight, they don't have to! It's a good system.
Considering Greg hasn't brought the issue up once since it's innitial conception, he's probably happy with it. Even if people offered to lend their services for free, doesn't it seem like a lot of hassle for next to nothing?
-- JP
Mathematically, 30 dollars a year (the highest suggested donation) is less than a dime a day, less than your daily Tim Hortons or Starbucks coffee. Most people aren't having there backs broken over a dime, and if even if money is really tight, they don't have to! It's a good system.
Considering Greg hasn't brought the issue up once since it's innitial conception, he's probably happy with it. Even if people offered to lend their services for free, doesn't it seem like a lot of hassle for next to nothing?
-- JP