Charitable Tax Deduction

Claim charitable tax deduction on your generosity

If you have been donating to charity you should let the tax agencies know, and avail the charitable tax deduction that becomes legitimately due to you. Your contributions to charitable organizations can add up to a sizeable deduction if you itemize them on IRS Form 1040, Schedule A.

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. You can refer to Publication 78 brought out by the IRS that lists all such organizations. This list is available online and in several public libraries too.

You cannot get tax benefits on donations to individuals, political organizations or political leaders nor can you claim benefits for spending time raising money for organizations by holding raffles, bingo or any game of chance.

Tax deduction is also available on contributions made in the form of merchandise, goods or services. However, this deduction can be claimed on the fair market value of these goods or services. For instance, you may decide to make a donation by gifting stocks of your company. In this case the value of the stocks will be calculated as the average of the highest and the lowest traded price on the date of valuation.

You can also donate your car. Its value will be calculated as the resale value at the time of donation. Planes and boats can be donated a well. However, if the claimed value of the donated motor vehicle, boat or plane exceeds $500 and the item is sold by the charitable organization, the taxpayer is limited to the gross proceeds from the sale.

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.

You must remember that only contributions actually made during the tax year are up for deduction. If you have used a credit card or issued a check, it does not matter when the transaction shows up in your account. You can seek deduction only in the tax year that you used the instrument.

So go on and keep a list of your generosity. The tax people would appreciate it. So would you.

For More Charitable Tax Deduction Infomation:

Best Money Related Products

Did you not find what you were looking for?

Try searching here!

• Sales tax measure to go on L.A. County ballot (Los Angeles Times)
  
  Schwarzenegger signs bill allowing voters to decide on a half-cent increase for mass transit. Gov. Arnold Schwarzenegger on Thursday gave the go-ahead for a sales tax measure on the November ballot in Los Angeles County for mass transit, while his appointees approved $730 million to reduce congestion on the 405 Freeway through the Sepulveda Pass.



• House passes tax relief, battle with Senate next (AP via Yahoo! News)
  
  The House has passed a $60 billion tax relief bill with incentives for solar, wind and other renewable energy sources and extension of many popular tax breaks, such as credit for college tuition.



• U.S. Senate extends renewable tax credits (UPI)
  
  WASHINGTON, Sept. 26 (UPI) -- The U.S. Senate approved an extension of the renewable energy tax credit.



• Transit tax on Nov. ballot in 7 NM counties (AP via Yahoo! Finance)
  
  A newly formed political committee will campaign for voter approval of a gross receipts tax increase in seven counties to pay for transportation services, including commuter rail from Belen to Santa Fe.



• North Sea workers face tax bills (BBC News)
  
  Thousands of North Sea workers could be in line for large tax bills, BBC Scotland can reveal.



• House, Senate at Odds on Tax Relief (Fox News)
  
  Four tax initiatives that address the alternative minimum tax, renewable energy, tax breaks and disaster relief are in trouble.