For members of the Jewish faith, the High Holy Days often raise questions about the tax deductibility of tickets to Rosh Hashanah and Yom Kippur services, temple dues, gift shop purchases and certain types of holiday donations to synagogues.
The rules for deducting and substantiating religious donations are somewhat different from the tax rules that apply to other types of charitable contributions.
Normally, if you make a charitable contribution and receive something in return, you can’t deduct the full amount of your donation. The value of any benefit received, such as dinner at a charity ball, usually must be subtracted.
But the tax law makes an exception for “intangible religious benefits,” such as admission to worship services. So if you purchased tickets to attend High Holy Day services this month, their cost can be fully written off as an itemized charitable deduction. (Most synagogues require nonmembers to purchase tickets to Holy Day services.)
Similarly, temple members whose annual dues include admission to High Holy Day services don’t have to reduce their charitable deduction for the value of the tickets. Membership dues in temples and churches are generally deductible in full.
Rabbis traditionally make a special plea for contributions during the High Holy Days. If you heed your rabbi’s plea, you’ll generally be able to deduct your donation in full. You won’t have to subtract the value of any of the religious benefits that are commonly given in return for contributions, such as an “aliyah” (the honor of being called to the pulpit for a Torah reading.) If you pay to have a memorial plaque hung on the temple wall in memory of a loved one, the entire payment is considered a deductible contribution; there is no need to adjust your deduction for the cost of the plaque.
On the other hand, if you purchase an item from the temple gift shop, such as a High Holy Day prayer book, you generally won’t be able to deduct any of the cost. (The only time you can deduct part of the cost of an item purchased from a charity is when you pay more than it’s fair market value, such as if you “overbid” at a charity auction.)
Some individuals who bought tickets to Holy Day services or make holiday contributions will eventually need to obtain a written acknowledgement from their synagogue. The tax law now requires donors to obtain a written statement verifying any contribution of $250 or more made on a given day to a particular charity. The note must disclose the amount of your donation and whether you received any benefit in return. If the benefits were strictly intangible religious benefits, the temple needs to indicate this fact, but it doesn’t need to describe or value them.
There is no need to pester the temple office for the paperwork during the holidays. In fact, many religious and charitable groups automatically send out substantiation letters for donations that require it.
Car lease disclosures
Beginning this month, shopping for a car lease was supposed to become less confusing as a result of new federal disclosure requirements for car dealers.
But federal regulators have given car dealers another three months to comply with the new rules, which require dealers to give customers a disclosure form that simply and clearly spells out all the costs and terms of the lease.
The Federal Reserve Board, which devised the new disclosure regulations, said it decided to extend the compliance deadline from Oct. 1 until Jan. 1 because most car dealers aren’t yet equipped to produce the computer-generated disclosures required by the new regulations. Installation of new leasing software is still under way at more than half of the 22,500 new-car dealerships that arrange leases through 9,000 leasing companies, the Fed said. Among other things, the new form will disclose how the dealer calculates the monthly lease payments, the base price of the vehicle, “early termination” penalties and the vehicle’s value at the end of the lease. The form will also make it easier to comparison shop.
Gary Klott, a former Sun-Sentinel staff writer, is a personal finance columnist for the National Newspaper Syndicate.
