I’d like to think the majority of you have already heard about the 10% excise tax on tanning services that was pushed through with the health care reform bill.  No? C’mon, even Jersey Shore’s Snooki keeps up to date with her tax law.  (And apparently McCain watches Jersey Shore. Who knew.)

So here’s the deal.  Effective July 1 (just in time for season 2 premiere of the Jersey Shore 2), fees charged by indoor tanning salons specifically for tanning services will be subject to an excise tax of 10%.

Like to get your tanning on at the gym?  As long as your gym doesn’t charge you extra for tanning services, then the excise tax won’t affect you.

This tax is in addition to any excise tax assessed by a particular state. Which now means that New Jersey residents will pay a total of 17% since the garden state also charges a 7% excise tax on these services. < insert Jersey Shore joke here >

The excise tax was implemented in the hopes that it would be enough to persuade tanners get out of the tanning beds due to the associated health risks. But who are they kidding? It’s highly unlikely that the additional 10% will deter anyone from visiting a tanning salon. People that get tans aren’t necessarily choosing between tanning and groceries (dear God I hope not), so the 10% increase just isn’t a big enough jump in price for it to matter to a lot of people. Would you stop tanning if instead of $20 you were paying $22? Didn’t think so. After all, taxing cigarettes got people to quite smoking, right?

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Did you receive a notice from the IRS or have other tax issues you need help with?  Well, you’re in luck.  Today, June 5, the IRS is hosting the second of three open houses.  You can get help with anything from IRS notices and return preparation (because let’s face it, some of you filed extensions – I hope) to setting up payment plans. They’ll even help you out with an audit.

They boast that they were able to help close to 7,000 taxpayers during their last open house on May 15.  I know it’s Saturday and the last thing you probably want to do is worry about taxes, but honestly, if you’ve got some free time and a tax issue to resolve, it may be worth paying them a visit.

The last open house is schedule for sometime this fall.

Each office will be open from 9:00 a.m. to 2:00 p.m. local time. You can find a listing of each IRS office here.

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The below question was asked by a taxpayer:

I’m the sole member of an LLC, can I take a charitable deduction on my business return for cash and services I provide to my church?

I get this question quite often.  And like most things involving tax, the answer is yes and no.   Charitable contributions of cash are deductible, but not on your Schedule C.  Instead, they’re deductible on your Form 1040, Schedule A.  This isn’t simply due to the fact that you’re an LLC.  In fact, the only business entity that can deduct charitable contributions on their tax return is a C corporation.  Every other entity, whether it’s an S Corporation, an LLC, or a partnership, has the amount contributed “flow through” to each member’s personal return.

I should add that most business owners confuse advertising expenses with charitable contributions of cash. Oftentimes, a business owner may “donate” cash to a local church or other charitable organization and, in turn, the business will get an ad placed on the organization’s website or in pamphlets.  This would actually be considered advertising and not a charitable contribution since your business received something in return for your donation: advertising.

You can have a charitable contribution and a business deduction with the same transaction.  The charitable contribution would be the amount that exceeded the value of the services or products you received.  As an example, if you donate $500 to a religious organization, and you then receive ad space on their website that they normally sell for $200, that $200 would be a deduction on the business return as advertising.  The $300 that exceed the value of what you were provided would be the charitable contribution that you would deduct on your Form 1040, Schedule A.

On the other hand, donations of time or services are never deductible.  This is true even if you can easily value the time or services you provide.

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