Supporting the U.S. Military - Things to Consider

A longtime presence in New York City, Doonan Tax Services recently expanded and moved to a new location in the Bronx. In addition to meeting the tax needs of clients throughout the tri-state area, Doonan Tax Services works to give back to the community. The firm is especially committed to supporting the U.S. military. 

Individuals who would like to help provide for those who serve the country have many ways to do so. Donating to military families financially is one of the easiest and most popular ways to support the troops, but there are a few things to consider before making a donation. 

Currently, there are more than 400,000 military-focused charities in operation. With so many organizations to choose from, it can be difficult to decide where to donate. If in doubt, groups such as Army Emergency Relief and the Navy and Marine Corps Relief Society are excellent options to consider because they provide a variety of important assistance services to military members and their families. 

Another option is to give to the Combined Federal Campaign (CFC), a workplace-giving program that benefits over 20,000 military charities. Federal employees can sign up to have a portion of their paycheck donated to the CFC, which makes supporting the campaign very easy to do. Of course, giving intelligently is important regardless of how one chooses to support service members. With a little research, however, donors can ensure that the charity they are supporting pursues a mission they believe in.

Red Flags for Tax Audits

Doonan Tax Services offers tax preparation and filing support for taxpayers in and around New York City. All clients receive free representation by IRS-certified enrolled agents in case of demand letters or audits.

Although the IRS may audit any taxpayer, certain practices and characteristics may increase a person's risk. Individuals with substantially higher than average income are more likely to undergo an audit, as the IRS stands to recoup more funds from these individuals. 

Relatedly, if a return is significantly lower than expected, or if deductions do not seem commensurate with income, the IRS may begin an audit to assess whether the taxpayer is claiming these deductions correctly or not. This is particularly likely for charitable donations that are much higher than average for a person at a particular income level.

Similarly, individuals who file a Schedule C for business income between $25,000 and $100,000 have an audit risk of 2.4 percent, which is significantly higher than wage earners in the same income bracket. This higher risk largely stems from the many potential business deductions, such as home office expenses and entertainment costs, that some taxpayers may abuse. Those with valid deductions must be sure to keep all receipts and written evidence in case an audit does occur.