Arrow Exchange Tax Solutions

  Ensure you’re properly documenting your charitable donations If you’re charitably inclined and itemize deductions, you may be entitled to deduct charitable donations. The key word is “may” because there are requirements you must meet. One such requirement is the need to substantiate charitable gifts with proper documentation that will satisfy the IRS. Indeed, a charitable gift may be legitimate, but if the taxpayer fails to substantiate it properly, the deduction may be lost. Making cash donations Cash donations, regardless of the amount, must be substantiated with one of the following: Bank records.  These can include bank statements, electronic fund transfer receipts, canceled checks (including scanned images of both sides of a check from the bank’s website) or credit card statements. Written communication.  This can be in the form of a letter or email from the charitable organization, showing the donee’s name, the contribution date and the amount. A blank pledge card...

  Help protect your employees’ 401(k) plan savings from fraud Recently, a 401(k) plan participant was defrauded of approximately $740,000 when he fell victim to an elaborate scheme perpetrated by overseas criminals. However, even friends, family members and employers have been discovered stealing from 401(k) accounts, adding up to millions of dollars in losses every year. Here’s what your organization can do to help keep your employees’ retirement savings safe from theft. Assessing existing protections If your organization sponsors a 401(k) plan, assessing plan service providers’ protection systems and policies is essential. Most providers carry cyber fraud insurance that they extend to plan participants. But there may be limits to this protection if, for example, the provider determines that you (the sponsor) or employees (participants) opened the door to a security breach. Your plan’s documents may say that participants must adopt the provider’s recommended security practice...

  Understand your spouse’s inheritance rights before getting remarried One of the golden rules of estate planning is to revisit your plan after a significant life event. Such an event may be getting married, having a child, going through a divorce or getting remarried. If you’re taking a second trip down the aisle, you may have different expectations than when you married the first time, especially when it comes to estate planning. For example, if you have children from a previous marriage, your priority may be to provide for them. You may feel your new spouse should have more limited rights to your assets than your spouse in your first marriage. Unfortunately, your state’s law may not see it that way. Indeed, in nearly every state, a person’s spouse has certain property rights that apply regardless of the terms of the estate plan. And these rights are the same whether it’s your first marriage or your second or third. Defining an elective share Spousal property rights are creatures...