Writing Off your Ice Bucket Challenge

Writing off your Ice Bucket Challenge

The Ice Bucket Challenge has invaded our water cooler talk. Just looking at my son’s Facebook wall, he and all his teammates were doing the challenge that raises money for ALS research. It’s caught on so much that Lebron James has challenged President Obama and a copycat version is emerging in China.

I immediately thought: “What a great way to get a charitable tax deduction.”

When you donate to a non-profit organization, you are able to take a tax deduction for the amount of the donation and any costs incurred to make the donation. According to an article on Forbes, Mark Zuckerberg challenged Bill Gates to the challenge. One can immediately imagine the possibilities of corporations benefitting from taking the time and effort to film and broadcast their Ice Bucket video. First of all, companies, that do good for society have a chance of increasing their ability to do well as a business. Consumers like being associated with brands that give back. Also, all the costs associated with giving are tax write offs.

Here are my tips for making sure your charity related write offs are in compliance.

• According to Internal Revenue Service, charitable donations are on the rise in spite of our economic downturn. With this new heightened level of giving, IRS has implemented charitable donation audits. These are streamlined audits where IRS will come directly to the tax professional and ask for receipts for a list of clients who had charitable donations on their income tax return.
• In order to make sure you are in compliance, you will want to keep your cancelled checks or on line receipts of your donations not just to ALS but to any organization for which you make donations.  In addition to the cancelled receipt, be sure to keep a copy of the method of payment. If you paid via a credit card, pay pal or ATM, you will want to have the bank statement showing this payment coming out of your account. In the case of the Ice Bucket Challenge, keeping copies of the videos you make and pictures will go along way as well.

According to the article, the ALS Association has raised 15.5 Million as a result of the challenge. Thus, IRS can at least expect 15.5 million in increased charitable donations this year. This is nine times the amount the ALS received during the same time period a year ago. Whether it is the Ice Bucket Challenge or Bobbing for Apples, it is great to see our nation having fun and united by a common cause. The tax deduction is icing on the cake.

Karla Dennis

As seen in Forbes Magazine, Karla Dennis is an expert tax and business strategist. As an enrolled agent, Karla is licensed to represent taxpayers in all 50 states. She holds a Masters in Taxation and Business Development and is the author of two books, Tax Storm and Against the Odds.

Karla, CEO of consultancy firm Karla Dennis And Associates, Inc.™, has saved her clients thousands of dollars and has been featured in various media outlets such as Forbes, MSNBC, KTLA, Yahoo! Finance, and SmartMoney, marking her as the ultimate tax expert.

As of 2014, Karla became the new host on the “Mind Your Business” radio show, KTLK AM 1150, sharing her financial and business knowledge with the greater Orange County and Los Angeles areas. As a supporter of women’s rights and issues, Karla is part of the Women Network, an organization built to educate and mentor women. In addition, Karla is the radio host for Women Network Radio, a show that aims to uplift and empower women of all walks of life.