Posts Tagged ‘Lindsey Anderson’

Tips to Maximize Tax Benefits of Charitable Giving

Lindsey AndersonBy Lindsey Anderson, CPA
Manager, Tax Services Group

Year-end is an ideal time to give to charity, both for the spirit of the holiday season and the ability to include those deductions on this year’s return. Here are some tips on how to maximize the tax benefits of your charitable donations:

Donate Highly Appreciated Stock Instead of Contributing Cash

When it comes to charitable giving, the IRS allows you to take a tax deduction for the fair market value of donated stock held for more than one year, even though you may have paid substantially less for the stock originally. By donating the stock directly to the charity, you will avoid capital gain tax that would have been owed if you had sold the stock directly.

Depending on your tax bracket, this strategy could result in up to an extra 23.8% tax savings on the gain. The charity will usually sell the stock as soon as they receive it to use the proceeds for their mission purposes. You save money by avoiding taxes on the gain and by receiving a charitable deduction for the fair market value of the donated stock.

When selecting this strategy, it is important to choose investments with significant unrealized gains – the higher the better.

Fund a Donor Advised Fund

Long gone are the days when you had to be part of the ultra-wealthy in order to create a charitable legacy through funding and running a Private Family Foundation. Maintaining a Private Foundation does still have its benefits — such as retaining control and involving family members in charitable giving — but it can be a costly endeavor.

A more cost-efficient strategy has arrived in the charitable world known as a donor-advised fund. These individual accounts are maintained by a qualified Charitable Foundation set up through your investment advisor. (Think Schwab Foundation or Fidelity Charitable Fund.)

Taxpayers can receive the same tax benefits of receiving an up-front deduction when funding their donor-advised account, but this method allows the money to stay in the account until ready to advise on its disbursement to the applicable charities. Donor-advised funds are an excellent strategy for tax savings in a year in which you enjoy significant taxable income, such as proceeds from the sale of a business.

Time Major Donations for When Income Is High

Most charitable contributions may be deducted up to 50% of adjusted gross income. Contributions to certain private foundations, veterans’ organizations, fraternal societies and cemetery organizations are limited to 30% of adjusted gross income.  With that being said, timing charitable contributions when income is high will help save tax dollars. If you were to sell your business for a large gain, time your charitable contribution to occur in the same tax year as the gain from sale to maximize your contribution.

Consider Sending Your RMD Directly To Charity

A qualified charitable distribution (QCD) is a direct transfer of funds from your IRA custodian payable to a qualified charity. If you are age 70½ or older, you can transfer up to $100,000 to charity tax-free each year, even if that is more than your required minimum distribution (RMD).

By sending funds directly to a qualified charity of your choice, you do not have to include the withdrawal in taxable income for the year. This is especially advantageous for those who must take their RMD but do not itemize their deductions, or have their itemized deductions phased out.

School Scholarship Granting Organizations

The state of Indiana allows for a very generous credit for donations made to a Qualified Scholarship Granting Organizations (SGOs). Qualified SGOs receive funding for scholarships from private, charitable donations. Each year, the Indiana Department of Revenue indicates the total amount of credits to be awarded. For fiscal year ending June 30, 2018, there are $12,500,000 in credits to be awarded by the Department of Education.

You should check on the remaining balance of available credits prior to donating to an SGO fund to ensure there are enough available for your donation. By donating to a SGO, you receive a charitable contribution for your donation on your Federal return as an itemized deduction. In addition, you receive 50% of your donation as an Indiana state tax credit to offset your state tax liability.

Indiana College Credit

Plan on supporting your favorite Indiana college or university? There’s also a credit for that! Indiana allows a credit of 50% of any donation made to an Indiana college or university, up to $200 per tax year. Tuition paid to a college or university is not a contribution and does not qualify for this credit.

Indiana Neighborhood Assistance Program

Indiana offers Neighborhood Assistance Program (NAP) tax credits annually for distribution by non-profit organizations. Organizations that focus on affordable housing, counseling, child-care, educational and emergency assistance, job training, medical care, recreational care, downtown rehabilitation and neighborhood commercial revitalization are typically granted NAP tax credits.

These credits allows the organization to incentive donations to their organization. By donating to an organization with an eligible NAP tax credits program, you receive a charitable contribution for your donation on your federal return as an itemized deduction in addition to an Indiana state tax credit in the amount of 50% of your donation amount.


A couple of warnings to keep in mind for all of these strategies. First, always make sure that you donate to qualified 501(c)(3) organizations; otherwise, your contribution will not be allowable as a tax deduction. Furthermore, the IRS has some stringent documentation rules that must be met depending on the type and value of your contribution.

Many taxpayers have lost out on large tax deductions because they didn’t obtain the proper documentation on the front end or realize that the charity was not actually a qualified organization with the IRS.

If you need assistance with your charitable giving plans, please call Lindsey Anderson in our Tax Services department at (317) 608-6699 or email

Employee Spotlight: Lindsey Anderson

Lindsey AndersonLindsey Anderson joined the firm in November of 2012, and has become a leader in ensuring the turbulent annual tax season always sees smooth sailing. As a Manager in Tax Services, her duties include tax compliance, projections and consulting with clients from many industry sectors with their tax planning matters. During the past year, she has also commenced delivering outsourced CPA services to several clients, as she continues her growth in the firm and building her versatility.

Lindsey earned a bachelor’s degree in accounting from the University of Indianapolis. She grew up in The Region of Northwest Indiana, a stalwart athlete who played on softball teams since she was a little girl through all four years of college. She roots for the Colts and Cubs, and has two animal children, Vinny and Freeney. Lindsey unwillingly admits to enjoying celebrity gossip and reality TV.

In her spare time, Lindsey volunteers with Heritage Place of Indianapolis, a nonprofit that helps older adults find and preserve their independence, serving on their Board of Directors. She is a member of the American Institute of CPAs and the Indiana CPA Society.

Choosing the Right IRA for You

Lindsey AndersonBy Lindsey Anderson, CPA
Manager, Tax Services Group

If your employer does not offer a 401k program – or even if they do — IRAs are a common recourse for retirement savings. Once upon a time there was only one type available, but with the proliferation of IRA plans there are now several to choose from, each with their own set of advantages and drawbacks.

These include “traditional” IRAs, Roth IRAs, SEP-IRAs and SIMPLE IRAs. Some of these plans have similar features, but others have unique qualities. All of them can help your family put aside significant savings for retirement on a tax-favored basis.

Here’s what you need to know in choosing the IRA plan that’s right for you.

Traditional IRA

Traditional IRA’s can be funded with deductible and nondeductible contributions.

Deductible IRA Contributions — You can make an annual tax-deductible contribution to an IRA if you (and your spouse) are not an active participant in an employer-sponsored retirement plan, or if you are in an employer-sponsored plan under a certain level of income (which varies from year to year). You can contribute up to $5,500 a year in 2016 (plus an additional $1,000 if over age 50). You can also contribute to an IRA for a non-working spouse.

Traditional IRA contributions reduce your current tax bill, and investment earnings within the IRA are tax-deferred.

However, withdrawals prior to retirement are subject to full taxation, plus a 10% penalty before age 59½ (unless one of the several exceptions apply). Additionally, you must start making mandatory minimal withdrawals by age 70½, or the amount not withdrawn is taxed at 50%.

Nondeductible IRA Contributions – You can make annual nondeductible IRA contributions without regard to your coverage by an employer plan and without regard to your AGI.  The earnings in a nondeductible IRA are tax-deferred within the IRA, but are taxed on distribution (and subject to a 10% penalty if you withdraw money before age 59 ½, unless one of the several exceptions apply).

Roth IRA

Roth IRAs differ in that contributions are taxed up front. Annual contributions to a Roth can be made up to the same amount that would be allowed to a traditional IRA, less the amount you contribute that year to non-Roth IRAs. You can only contribute to a Roth if your adjusted gross income doesn’t exceed certainly levels that vary by filing status.

Earnings within the IRA are tax-deferred just like a traditional IRA, but are tax-free if paid out after five years from when you first made a contribution, and upon reaching age 59½. (If both of the conditions are not met, taxes and penalties may result unless an exception applies.)

One notable benefit of a Roth IRA is that you can continue to make contributions after age 70½, and do not have to take minimum distributions as with a traditional IRA. This makes a Roth IRA an excellent wealth-building vehicle for your family.

It is possible to convert or “roll over” a traditional IRA into a Roth IRA. In doing so you are choosing to pay taxes on the amount of the investment (excluding any non-deductible IRA contributions) now as opposed to in the future. If you are expecting to have a low income year, it might be the perfect time to do so as you can take advantage of a lower tax rate.


Small businesses that want to keep the administrative costs of a retirement plan low may able to set up a simplified employee pension (SEP) or savings incentive match plan for employees (SIMPLE) IRA. Contributions are made to an IRA-type account in the employee’s name.

Annual contributions to these plans are controlled by special rules and aren’t tied to the normal IRA contribution limits. Distributions from a SEP IRA or SIMPLE IRA are subject to tax rules similar to those that apply to deductible IRAs.

If you are self-employed, individuals can contribute as much as 25% of his or her net earnings into an SEP up to $53,000, which is deducted from total income. You have until the due date of your individual income tax return (including extensions) to deposit your SEP contribution

If you need any assistance with choosing the right IRA, please call Lindsey Anderson in our Tax Services department at (317) 608-6699 or email

Employee Spotlight: Lindsey Anderson

Lindsey AndersonA Manager in the Tax Services department, Lindsey Anderson assists individual clients and companies across a broad spectrum of industries with preparing federal and state income tax filings, projections and compliance issues. Since joining the firm in November 2012, she has played an important role in ensuring the annual busy tax seasons go as smoothly as they do.

Hailing from northwest Indiana, known affectionately as “The Region,” Lindsey grew up playing and loving sports. She played softball competitively from age 6 through all four years of college. She and her husband Mike are avid fans of the Colts and Cubs.

A graduate of the University of Indianapolis with a degree in accounting, Lindsey is a member of the American Institute of CPAs and the Indiana CPA Society. She and Mike have two animal children, Freeney and Vinny. Lindsey volunteers as treasurer for her neighborhood homeowner’s association, and her guilty pleasures are reality television and celebrity gossip.

How to Make Electronic Tax Payments

Lindsey_Anderson_smallFiling your federal and state income taxes can be burdensome for business owners and individuals. It is possible to arrange to pay your taxes electronically, but many people who have never done it before can find it challenging.

Sponsel CPA Group is here to help with a handy set of step-by-step instructions for paying your federal and Indiana taxes online!

Electronic Federal Tax Payment System (EFTPS)

Some businesses were pre-enrolled in EFTPS, but individuals were not. Individuals can still register with the service and use it to pay any balance due from their federal tax return, as well as make quarterly estimated tax payments. The website also allows you to track payment history.

If you’re not already enrolled, go to and follow these instructions:

  • Click on the “Enroll” button.
  • Accept the terms and choose “Enroll me as an individual.”
  • You will then be prompted to enter personal information such as social security number, name, address, bank information, etc.
  • Within five to seven days after enrolling, you will receive a PIN and enrollment number via U.S. mail. This letter will also have instructions as to how to complete the registration process including creating a username and password.

Once you’re registered, it’s easy to make payments online by logging in and following the prompts. Tax payments must be submitted one calendar day before the tax due date in order for the payment to be processed in a timely manner. You can make payments up to 365 days in advance if desired. You will receive an Acknowledgement Number as proof of payment. Make sure to retain it for your records.

If you still prefer to enroll by phone and “snail mail,” call (888) 725-7879 to request an enrollment form by mail. You will complete the form and receive a PIN within seven business days after EFTPS receives your enrollment form. Then call (800) 555-3453 anytime to make a telephone payment. You will need your social security number and EFTPS PIN.

Indiana Department of Revenue ePay

Indiana’s ePay system allows individuals and businesses to make bill payments, estimated tax payments, extension payments and balance due income tax payments. You do not need to register an online account with the ePay system.

Go to and click on “Get Started” near the bottom of the page.

  • Select the type of payment you would like to make (i.e., Tax Return Payment, Estimated Payment, etc.).
  • Enter your personal information as prompted. The website will ask for information such as filing status, social security number, payment amount and tax year to verify your identity.
  • Continue through the prompts until the payment is submitted.

Indiana ePay payments can be scheduled up to 90 days in advance using the electronic check feature. Electronic checks require a $1 fee. If using a credit card, a sliding fee will be charged based on the amount paid.

You will receive a Payment Confirmation Number and/or Electronic Transaction Number as proof of payment. Make sure to retain for your records.

If you need any assistance with setting up electronic tax payments, please call Lindsey Anderson in our Tax Services department at (317) 608-6699 or email

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