Showing posts from August, 2021

To Donate, or to Sell, That is the Question.

Dear Accounting Professor: I have an opportunity to donate a car to a non-profit organization for $2000 donation letter or I can sell the car to them for $1000 cash.   Should I donate the car or sell it to them? I am single and work in the telecommunications industry.   If all goes well for the rest of this calendar year, I anticipate that my income will place me right on the edge of the 22-24% tax brackets. Telephone Lineman   Dear Lineman, Thank you for your question.   The answer you seek is not as simple as one would expect.   Part of this answer is contingent on the non-profit’s intended use of the vehicle and the non-profit’s tax-deductibility status.   You can check the tax-deductibility status of your non-profit via the IRS’s database at .   At this site, you can see copies of the non-profit’s recently released income tax returns and determination letters from the IRS.   I present the possible scenarios and my recommendations below:

Employee vs. Contractor Status

Dear Accounting Professor:   My firm is in the health care industry and requires a working interview with prospective employees who will directly interact with our patients. This occurs when we are considering hiring someone permanently in our office and we do not acquire them through an employment agency. The candidate for hire is brought into our office for at least one day and required to work for the full shift each day. This allows us to observe their interactions with our patients and to get feedback from those patients about their experiences. We’ve been paying these prospective employees as a contractor for years because our accountant told us that we do not need to pay them as employees as long as we pay each of them less than $600 over the course of any given tax year. Is this correct?   Concerned Manager Dear Concerned:   Thank you for your question. No, this is not correct in my opinion. The Internal Revenue Service (IRS) is explicit as to who is an employee and who