Members of the Maryland Association of Certified Public...


January 26, 1995

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q: I pay in over $1,000 in church tithes at the end of the year. Can I use that deduction on a short form?

A: No. Charitable contributions are considered part of "itemized deductions," which must be reported on the long Form 1040 Schedule A, and not on the short Form 1040A or Form 1040EZ. To determine if you should report itemized deductions and use the long form, compare your total itemized deductions to the standard deduction for your filing status. If the standard deduction is higher and you meet the other requirements for filing the short form, take the standard deduction. If you determine that the itemized deduction is higher, be sure to have written records (receipts, canceled checks) from qualified charitable organizations sustaining contributions of $250 or more.

Q: In a self-directed IRA, are stock commissions treated as part of the tax year's IRA contribution or do they become part of the general gains and losses in the IRA?

A: Stock commissions in an IRA are part of the gain or loss of the IRA, whether self-directed or not. If you decide to reimburse the IRA for losses, the reimbursements are considered as part of the annual contribution. Keep in mind that you are limited to the amount you can contribute to an IRA each year.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

A joint service from The Baltimore Sun and the Maryland Association of Certified Public Accountants can help you with your tax queries. Association members, all CPAs, will answer questions from readers until April 15 and also offer a Tax Tip of the Week.

To ask a tax question, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll County 848-0338. Using a touch-tone phone, enter 6225 after you hear the greeting. Push 1 to ask a tax question; push 2 to hear the tax tip.

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