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Charitable Tax Deductions are Easy and Rewarding

By: Angelina Pyrkins

Giving to charity is a good feeling, and most people give freely without expecting anything in return. Even the most generous contributors will agree, however, that a break at tax time turns that good feeling into a great one.

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.

Donating to charity is easy to do, but it does carry certain risks. The tax agencies will only grant tax deductions for contributions made to recognized organizations. Check to see if the organization is recognized by the tax agency before you make your donation. Look for the IRS Publication 78 for a full list of recognized charitable organizations. You can find this list at your local library, and it's also available online. Take the time to research, and be sure that your money is truly going to a worthy cause.

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.

It's true that it's better to give than to receive, but it doesn't hurt to get a little back. Keep a list of your charitable donations, and claim them at the end of the tax year. Consider it your just reward.

Article Source: http://www.simplepetcare.com/pet-articles

Angelina Pyrkins regularly contributes to various web sites, on home equity and family matter subjects.
Click here for other unique charitable donation articles.

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