Tax Deductions

[lisard5]

I was going to respond but everyone pretty much covered it. . . if you get something of value for what you pay (the right to march for exchange of dues) you can't deduct it.

Chances are if you're paying for your dues and you're able to still march DCI . . .then you're not going to be itemizing your deductions anyways unless you're a super crazy rich kid with a couple of houses or something :)

[FlagForever]

OK here's my question on it:

If I march Cadets, lets say I hand them a check for 2 grand. That's all the government knows. They're not going to my shows or seeing that I'm getting the experience of a lifetime in return. All they know is that I gave a 305-C non-profit organization 2 grand.

Now...

If I'm a DCI fan and I decide to donate to Cadets, I hand them a check for 2 grand. That's all the government knows. They don't know that I received nothing in return. All they know is that I gave a 305-C non-profit organization 2 grand.

What's the difference? (not ethically, I mean to the government, tax-wise)

[QuentinTarantino]

OK here's my question on it:

If I march Cadets, lets say I hand them a check for 2 grand. That's all the government knows. They're not going to my shows or seeing that I'm getting the experience of a lifetime in return. All they know is that I gave a 305-C non-profit organization 2 grand.

Now...

If I'm a DCI fan and I decide to donate to Cadets, I hand them a check for 2 grand. That's all the government knows. They don't know that I received nothing in return. All they know is that I gave a 305-C non-profit organization 2 grand.

What's the difference? (not ethically, I mean to the government, tax-wise)

If you claim the payment as a tax deductable contribution, the IRS may ask you for proof (receipt). You won't have one so you will be forced to adjust your return. The Cadets won't be able to give you one. If the IRS found out the payment really wasn't a contribution the Cadets would have committed tax fraud.

[AlexL]

so what if a corps didnt say "dues" (or had very minimal dues) but required members to raise $2K in "fundraising"... any money given to the corps could then be considered a donation couldnt it?

[lisard5]

so what if a corps didnt say "dues" (or had very minimal dues) but required members to raise $2K in "fundraising"... any money given to the corps could then be considered a donation couldnt it?

Um . . you're still getting to march because you're giving them money. So no deduction.

Like I said. . . for the Jr. Corps types that are probably only filing their first couple of tax returns. . . in order to get anything for charitable you have to itemize. . . you'd have to have around $5150 of total deductions to even benefit. If not you'd take the standard deduction anyways and then you don't get any separate deductions etc. . . .

Here's the instructions if anyone is interested http://www.irs.gov/pub/irs-pdf/i1040sa.pdf Charitable deductions begin around page 4

[TomMoore]

No. You don't get a deduction because it's not a charitable gift.

You are getting your membership in return for your dues -- fees for services.

Technically, also, if someone pays your dues for you, they're discharging your obligation to the organization, so they shouldn't take a deduction either -- the IRS takes the position that your sponsor isn't making a charitable gift either, he or she is discharging your personal obligation to the corps -- they're making a gift to you essentially, not the corps, by paying your dues.

[SkyRyder_FMM]

You know these tax question seem to surface about every 6 months, and there always seems to be a lot of confusion about what is and is not dedictible. I wonder if it would make sense for there to be a FAQ area on DCP where information like this could be posted and pinned? I'd imagine this could serve a very useful purpose, and those of us with expertise in the area could be sure that questions are answered appropriately.

[dbc03]

OK here's my question on it:

If I march Cadets, lets say I hand them a check for 2 grand. That's all the government knows. They're not going to my shows or seeing that I'm getting the experience of a lifetime in return. All they know is that I gave a 305-C non-profit organization 2 grand.

Now...

If I'm a DCI fan and I decide to donate to Cadets, I hand them a check for 2 grand. That's all the government knows. They don't know that I received nothing in return. All they know is that I gave a 305-C non-profit organization 2 grand.

What's the difference? (not ethically, I mean to the government, tax-wise)

Like an above poster mentioned, unless you're a rich kid you're not going to be itemizing your deductions as a marcher anyway so it doesn't matter.

In order for itemizing deductions to be worthwhile, you need deductions that end up being worth more than the standard deduction rate ($5,150 for a single person in 2006). Most people don't have any benefit from itemizing deductions until they buy a home, and I seriously doubt that many marchers own their own home.

[JayM]

You know these tax question seem to surface about every 6 months, and there always seems to be a lot of confusion about what is and is not dedictible. I wonder if it would make sense for there to be a FAQ area on DCP where information like this could be posted and pinned? I'd imagine this could serve a very useful purpose, and those of us with expertise in the area could be sure that questions are answered appropriately.

You know, I honestly think it would make perfect sense for us to have a FAQ pinned at the top of the forum that answers common questions and repeat topics. It's certainly not an unheard-of practice in the forum world.

You know, "what does spolie mean" and all that sort of stuff...

[bearz]

I called the IRS on this awhile back, as I had a question about how to claim the vegetables I had grown for the corps this summer. Anything over either $300 or $500, depending on your income and what you are deducting (goods vs cash) MUST be acknowledged by the organization in writing as a donation and fully deductible. Therefore, if the corps acknowledged your dues as a donation they would be in serious trouble with the IRS, and so would you, knowing it was not a deduction and claiming it anyway.