Your client made a substantial donation to a public charity that exceeded AGI limits for deductibility purposes in the year the gift was made. What is the best way to capture this in eMoney so that deductions can be applied to the current or future tax years?

Your client made a substantial donation to a public charity that exceeded AGI limits for deductibility purposes in the year the gift was made. What is the best way to capture this in eMoney so that deductions can be applied to the current or future tax years?

• A. Record the donation as a one-time expense in the current year.
• B. Enter the remaining charitable gift amount that was not taken as a deduction in the Charitable Gifts Carry Forward section under Tax Assumptions and input the year for which it is valid.
• C. Deduct the full amount in the current year and adjust future tax projections.
• D. Ignore it and assume future tax years will automatically absorb the excess.

Answer: (B)

When charitable deductions exceed the annual limit tied to AGI, the portion beyond the limit can be carried forward to future years. In eMoney, capture this by entering the amount not deductible this year in the Charitable Gifts Carry Forward area under Tax Assumptions and specify the year(s) it can be used. This lets the software apply the carryforward to future tax years as appropriate, keeping projections accurate. Recording the full amount now, or treating it as an automatic deduction in later years, would misstate the deduction and tax planning.

When charitable deductions exceed the annual limit tied to AGI, the portion beyond the limit can be carried forward to future years. In eMoney, capture this by entering the amount not deductible this year in the Charitable Gifts Carry Forward area under Tax Assumptions and specify the year(s) it can be used. This lets the software apply the carryforward to future tax years as appropriate, keeping projections accurate. Recording the full amount now, or treating it as an automatic deduction in later years, would misstate the deduction and tax planning.