Tag: Donation

4 Overlooked Tax Deductions That Yield Big Rewards

Tax time is upon us. While some people look forward to this time of year, many more dread it as they think about the amount of money that they may have to pay. It must be done, so let’s work at getting the most money back. After all, the IRS claims that millions overpay each year.

1. State Income Taxes
If you paid state taxes last year, then you are eligible to subtract them from your federal taxes this year. Make sure to know the exact amount that you paid in these taxes, so that your return is not delayed.

2. Job Search Expenses
Did you look for a new job in 2011? If so,  you are allowed to deduct up to 2 percent of your gross income for the expenses involved in a job search from this year’s taxes. To claim this deduction, you must not be looking for your first job, nor have any substantial break between your last job and the new one. The search must be for a job in the same occupation. If you pay an agency fee to help you in your search, then you can subtract that cost unless your new employer reimburses you for the cost. You can deduct cost for mailing and distributing your resume. If you travel, then the cost is deductible, as long as the primary reason for traveling was to look for a job.

3. Donations
We love those who give and so does the IRS, as long as you give to a qualified organization. If you get merchandise or a prize in exchange for your donation, then you can only donate the amount over the normal price of the merchandise. If you donate stock or real property, you can get a donation for the fair market value of those items. You must keep a record of the name of the organization, the date of the contribution and the amount of the donation. For amounts over $250, there are specific forms that you must file with the IRS. You can deduct the cost of travel to a volunteer position. You can also deduct any cost involved in your participation, such as uniforms. Don’t forget that you can also deduct your tithes and offerings to a religious organization.

4. Work
Many expenses can be deducted thanks to working. If you must have a cell phone for work, then the amount you pay for the cell phone above your normal usage is deductible. You can also deduct any dues paid to unions if you must belong to it in order to have your job. If you choose to belong to a professional organization, you can deduct those dues. You can also subtract the costs of any reading material that helps keeps you abreast on what is happening in your industry. If your job requires uniforms that would not be worn in the rest of your life, then you can subtract those costs.

Looks a little better, doesn’t it? Remembering to take each deduction that you can will help to lower your tax bill – so don’t be lazy!

Ashley Miller likes to write about finance, travel and Flowerdelivery.net.

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Ways to make the Most out of a Charitable Donation

Any way you slice it, charitable donations are a plus for everyone involved. When you decide that it’s finally time to give back, there are countless ways to do so. But how do you make the most out of your decision to help out? There certainly isn’t anything wrong with maximizing your return on your donation, and helping out is easy. Here are a few things you may want to consider.

Volunteer

This is the simplest way to give back to your local community, and potentially the most rewarding. Anyone can donate money, but to give up your free time in the support of the less fortunate is truly the definition of charitable. Every community is loaded with opportunities to do so. From food banks to home repair to hospitals and retirement communities, the possibilities are as endless as they are rewarding.

Make a donation

If volunteering is not in the cards for you for whatever reason, consider making a donation. Again, there are tons of options here. Although passing cash out of your car window may not be ideal, donation money to a charity is nearly as simple. Food banks take canned and dry goods, many places will take a bag of clothes off your own front step, and there are plenty of places to drive in and drop off. Consider that every time you drop off a bag of clothes, you are also lightening your own, certainly overstuffed closet. many people have clothes that are perfectly fine, and have not been worn in years, sometimes decades. Release yourself from this burden of too much stuff while helping people clothe themselves. This is especially true during the winter, when people are trying to stay warm.

Make a gift out of it

Everyone has an aunt or uncle who during the holidays donates money toward a well in Africa or an animal in India. Although it’s true that these gifts can sometimes be a bore to open, they do immense good across the world. Giving the gift of clean water or life giving goat to people you will never meet is still a worthwhile endeavor and makes everyone feel better about themselves. There are many online sources for this type of donation, so finding one is a snap. Plus, you get the added benefit of:

Writing it off

Nearly all of your charitable donations can be used as a tax write off. Donations of food, clothes, furniture, cars, and computers just to name a few will certainly come with a receipt that can be plugged into your taxes to lighten your own burden come that time of year. While this shouldn’t be your driving force for helping out(after all, how much write off can one person possibly have), it is a bonus for you for helping others. So, with no negatives involved at all, why not help out with a donation of your time, money, food, or old clothes and household items? It truly is a win-win for all parties involved.

George Gallagher is a persona finance writer and blogging enthusiast.  He has also been working with students to fund their education with the best private student loans.

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Rules for Charitable Contribution Deductions

Charitable contributions made to qualified organizations through the year may help reduce your tax bill.  Many organizations give donors pertinent details about their tax-deductible donation including the amount that can actually be reported on your tax return.  The following tips may help ensure donation made will be beneficial on your taxes.

  • Make sure you report charitable contributions on the correct form. The IRS states that form 1040 must be used to itemize deductions using Schedule A.
  • Upon reporting the deduction, make sure it was made to a qualifying charitable organization.  Contributions reported shouldn’t be donations made to individual or political organizations.
  • There are rules to review if your contribution included a vehicle.  Clothing and other goods should be fair market value and in good condition in order for it to deductible.
  • Items received for making a contribution such as ball game tickets or services; deduct the amount that exceeds fair market value.
  • When reporting cash contributions, make sure you have proper documentation that proves the amount.  This may include bank statements, a correspondence from the organization or even paystubs if donations were made via payroll deduction.  A phone bill will suffice for text donations as long as it states the name of the organization, date of donation and the amount given.
  • Donations of $250 or more must have proper documentation such as a bank record or written notice from the qualifying organization.  You may need to report if you were given anything in exchange such as any gifts or services. Noncash donations of $500 or more should be reported on IRS Form 8283 (Noncash Charitable Contributions) and attached to your tax return.
  • If you donation was an item that valued over $5,000 an appraisal is required.  Obtain an appraisal from a qualified appraiser and report data on the IRS Form 8283 section B.

Additional details can be reviewed in the IRS Publication 526: Charitable Contributions.  Information regarding property value can be review in IRS Publication 561: Determining the Value of Donated Property.  It is important to report contributions to the best of your knowledge with honesty.  The IRS may question donations made and contact you for proof.  If you are found to have provided false information on your federal income tax return, you may face penalties.  Contact a tax professional with questions or concerns about charitable contributions made.

Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from credit cards to mortgages to how to setup an umbrella company.

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