Monday, March 19, 2007

Cut Your Taxes With Good Deeds

While doing my taxes with TurboTax, I was embarrassed to find out that the average charitable donations in my income bracket were a LOT higher than what I had donated in 2006. Right then I resolved to correct that in 2007. This article from Fool.com has some nice tips on how to make sure you are filing your deductions correctly.



The folks who oversee the Internal Revenue Service (yes, even the auditors get audited) recently discovered that roughly one-quarter of taxpayers who took a tax deduction for donating valuable stuff to charity didn't substantiate their gifts.


Turning junk into money
First, know that you can get a pretty good tax perk for donating your unwanted belongings to a qualified charity. If you're wondering whether your charity is qualified, check the IRS web site. …


Things to watch out for
Here's one wrinkle in these rules. If you're donating something that's not in good condition, but it has a value of $500 or more and you get a qualified appraisal, you may still qualify for a tax deduction. …


Not too much of a good thing
Just so you know, there are some limits to the generosity of these laws, but they're too high for most people to worry about. Technically, you can only deduct donations that amount to less than either 50% or 30% of your adjusted gross income. …



More here.

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