Month: October 2008

Thinking about giving to charity?

Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors,  wrote, in 2004, about giving in tough economic times.  Since the giving season of 2008 is upon us, and 2008 will be much tougher than 2004, I wanted to share the questions she gives that can help us prioritize our giving:

What internal forces drive you to give? – It’s important to recognize your motivations for giving.  Giving motives clarify what’s most important to you:  causes you grew up with, issues that represent what you stand for, or problems around which your whole family can rally.

What external issues tug at your heart? – 

  • Big problems:  poverty, disease, global warming
  • Specific challenges:  literacy, Parkinson’s
  • Places:  Montana, Appalachia, Afghanistan
  • People:  artists, children, refugees, innovators
  • Institutions:  schools, museums, ballet companies

Once you have sense of the kind of issue you’re attuned to, you can explain clearly to yourself what you’re giving to.

How do you want the change to happen? – Consider how an organization tries to solve a problem, not just which problem it tries to solve.  
How do you want to get involved? – Decide how to invest your money as well as your time:

  • Number of gifts:  One gift? 10? 100?
  • Type of gifts:  General support? Specific projects? challenge grants?
  • Level of involvement;  Anonymous giving? Work on a project?  Lend professional expertise? Fundraising? Board service?
There’s no right or wrong level of giving or involvment, but once you’ve answered these questions, it’s time to put your “mouth where your money will be.”
Two websites to use to check up on charities:

Bullying in the Workforce

Courtesy of Accounting Web and the Texas Society of CPA’s:

If you thought you left bullying behind along with jump ropes and gym uniforms, think again. The Workplace Bullying Institute, yes there is such a thing, reported last year that 37 percent of the U.S workforce or 54 million employees are being bullied now or have been bullied at the workplace at some point during their careers.

“Organizations don’t realize that just rude behaviors, ongoing discourteous types of behaviors, have such negative effects on employees,” Sandy Hershcovis, assistant professor of business at the University of Manitoba, told livescience.com.

Although there are no laws on the books, several states have considered healthy workplace legislation to ban bullying behaviors, according to The Inside Training Newsletter. Since 2003, these states have included: California, Connecticut, Hawaii, Kansas, Massachusetts, Montana, Missouri, New Jersey, New York, Oklahoma, Oregon, Vermont, and Washington.

A form of workplace aggression, bullying behaviors include incivility, yelling, spreading gossip or lies, insulting employees, as well as hostility, verbal aggression, and angry exchanges. Various proposed laws define abusive conduct in a broad sense as “conduct of an employer or another employee that a reasonable person would find hostile or offensive,” Susan K. Lessack, a partner with Pepper Hamilton’s Labor and Employment Group told The Inside Training Newsletter

Housing Act

With all of the attention on the Economic Stabilization Act, many of the “Main Street” provisions of the Housing 
Act passed in August have received less notice:

H.R. 3221, the “American Housing Rescue and Foreclosure Prevention Act of 2008”—the Housing Act—was signed into law by the President on July 30, 2008. This sweeping measure is designed to shore up the ailing housing market as well as tighten lending practices and reform financial institutions associated with that market. It also contains a number of tax changes, including tax breaks for homebuyers and homeowners, relaxed requirements for tax-exempt bonds, eased AMT rules, tax changes for businesses, as well as highly specialized changes affecting low-income housing and special investment vehicles called Real Estate Investment Trusts (REITs).

 

Good:

Property tax deduction for non-itemizers. For 2008 only, those who take the standard deduction instead of itemizing deductions may claim an additional standard deduction for State and local property taxes paid (but taxes written off as business deductions don’t count). The deduction is $1,000 for joint return and $500 for all other filers (or actual property tax paid, if that’s less).

Watch:

Reduced homesale exclusion for some sellers. After 2008, some homesellers who don’t use their properties as principal residences for their entire ownership period may wind up paying more of a tax bill than they would under current rules (or pay tax when none would be owed currently). The tax break affected is the homesale exclusion, which generally allows up to $250,000 of homesale profit to be tax-free if a home was owned and used by the seller as a principal residence (i.e., main home) for at least 2 of the 5 years before the sale. In general, the tax-free break can only be used once every 2 years. The tax-free profit amount is up to $500,000 for married taxpayers filing jointly for the year of sale if several conditions are met. A reduced maximum exclusion may apply to taxpayers who must sell their principal residence because of health or employment changes (or certain unforeseen circumstances) and as a result (1) fail the 2-out-of-5-year ownership and use rule, or (2) previously used the homesale exclusion within two years.

For sales after 2008, gain potentially eligible for the homesale exclusion will be reduced proportionately for the period of time a home wasn’t used as a principal residence. The prime example is a vacation home that is turned into a principal residence by its owners, but the new rule also can hit individuals who use a property as a main home for a while, rent it out for a period of time, and then move back in. There are, however, a number of exceptions. For starters, pre-2009 periods of non-principal-residence use don’t count, and neither do periods of temporary absence totaling no more than 2 years due to health or employment changes (or certain unforeseen circumstances), or up to 10 years of absence for qualifying members of the military or certain government employees. Finally, non-principal-residence use doesn’t count if it occurs (1) in the five years preceding the sale, but (2) after you permanently stop using the home as a main home.

Underground Economy:

Information reporting of merchants’ credit card transactions. After 2010, banks will be required to file an information return with the IRS reporting the total dollar amount of credit and debit card payments a merchant receives during the year, along with the merchant’s name, address, and taxpayer identification number (TIN). Similar reporting also will be required for third party network transactions (e.g., those facilitating online sales), with exceptions for certain small merchants. The new information reporting requirement is designed to boost the tax compliance rate of merchants.

Physics does Economics

Mark Buchanan, a theoretical physicist, is the author, most recently, of “The Social Atom: Why the Rich Get Richer, Cheaters Get Caught and Your Neighbor Usually Looks Like You.”  He explains in the NYTimes how physicists are creating models to explain the markets.  He offers examples of three models one of which explores how a very small, such as .1%, transaction tax can actually stabilize some markets.  The tax slows down speculation, especially in foreign currency markets.

Perhaps “Numb3rs” can do a “ripped from the headlines” show.