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People who give to charity do so freely, without a tinge of "what's in it for me". But even the most earnest philanthropists will agree that a tax break can make the good feeling you get from giving, even better. It's easy to realize a tax break from your charitable donations. Keep track of the money you give throughout the year, and use an IRS Form 1040, Schedule A. With this document, you can let the tax agency know about your generous contributions, and you will be rewarded with a legitimate charitable tax deduction. Like all things in life, charities can be good or bad. Most are worthy, legitimate organizations that rely on the donations of generous individuals. On the other hand, some "charities" are no more than crooks who are happy to take your cash and run. That's why it's so important to do your homework before making your donation. Ask for the group's charitable organization number. It's also a good idea to pick up a copy of the IRS Publication 78. This guide is available online and at most public libraries and provides a complete list of all charitable organizations that are recognized by tax agencies. If you're looking for a tax break for donations made to an individual person, a politician or a political organization, you're out of luck. No tax benefits are available for these types of gifts. Additionally, you cannot claim a deduction for the time that you spend raising funds through activities such as raffles, casino games or bingo. It is possible to claim a tax deduction for a contribution of goods, merchandise or services. These types of donations, known as "gifts in kind", can be claimed at fair market value. If, for example, you choose to donate company stocks, you can claim the value of the donated stocks. The value is calculated as an average of the highest and lowest traded prices on the valuation date. That old car in the driveway is another potential moneymaker. Get an appraisal of the vehicle, and you will be able to claim a tax deduction for the car's market value at the time of your donation. Planes and boats may also be donated to charity for a tax deduction. Keep in mind that if the claimed value of the donated vehicle, boat or airplane exceeds $500, and the charitable organization sells the item, your tax deduction will be limited to the gross sale proceeds. Your donation of personal and household items can also realize a tax break. The value of the item is based on the amount that you would receive if you sold it at a garage sale or flea market. In other words, if you have an antique desk that's valued at $500 at a second hand shop, you may be able to claim a tax credit of $500 should you choose to donate the desk to a recognized charity. Keep in mind that all charitable donations valued at over $250 require a proper receipt. Only contributions made during the tax year will qualify for a deduction. If you have used a credit card or issued a check, it does not matter what date the transaction shows on your account. You can claim the deduction only in the tax year that you made the donation. Even if you give to charity without expecting anything in return, it's a good idea to keep records of the donations you make throughout the year. Itemize them at tax time and treat yourself to a tax break. It will make you feel even better about the good deeds that you've done.
Article Source: http://www.philvault.com
Angelina Pyrkins is a columnist for a variety of popular Internet magazines, on family tree and family fun issues. Click here to get your own unique version of this article: Uber Articles directory.
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