Tax Deduction For Your Generosity
If you have been giving money a way bit too much, its time for
you to get some relief too right?
your contributions can be tax deductible under IRS Form 1040,
Schedule A. and it adds up to a huge chunk.
But before you make the donations you must carry out a few
checks. You must remember that only donations made to
organizations that are recognized by tax agencies are eligible
for tax deduction. Publication 78 gives a list of organizations
that are allowed for these purposes and the same is available
online and in public libraries too.
Donations to individuals, political organizations or political
leaders cannot be claimed for tax-deductible purposes nor can
you claim benefits for spending time raising money for
organizations by holding raffles, bingo or any game of chance.
Contributions made in the form of merchandise, goods or
services qualify for tax deductions. And it is on Fair Market
Value only. For example, if you are gifting stocks, then the
highest and the lowest traded prices are taken and the average
is assumed as FMV for the purpose.
You can also donate your car, planes or boats. Resale value at
the time of donation is calculated. If the claimed value exceeds
$500, then only the gross profits can be claimed.
If you are donating a household or personal item then the
deduction can be claimed on the amount that the item would have
fetched in a garage sale or at a flea shop. All charitable
contributions over $250 need a proper receipt to qualify for tax
deduction.
Remember, the tax year is also a crucial factor; deductions are
allowed on items only in that year and no carry forwards. So go
on and keep a list of your generosity. The tax people would
appreciate it. So would you.
And god is watching you from the sky up above and showering you
with the choicest of blessings.