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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.

When you donate to your favorite charity, make sure to let the tax agency know. Charitable tax deductions are readily and legitimately available to you. Your contributions to charitable organizations can add up to a sizeable deduction when you itemize them on IRS Form 1040, Schedule A.

Before you make any donations, be sure to carry out a few checks. Remember that only donations made to organizations that are recognized by tax agencies are eligible for tax deduction. Refer to the IRS Publication 78 for a complete list of all recognized charitable organizations. Check your public library or search online to view this list.

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.

You don't necessarily have to give cash to get a tax break. Deductions may be available for contributions of merchandise, goods or services. The amount of the tax break is based on the market value of the merchandise, goods or services donated. In other words, if your business donates a product valued at $200 to a local charity, you can claim a $200 tax deduction, provided that it is a charitable organization recognized by the tax agency. It's also possible to receive a tax deduction for your donation of company stocks. The value of the stocks is based on the average high and low values on the date of valuation of the gifted stocks.

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.

Whether you choose to donate cash or merchandise to your favorite charity, remember that only contributions made during the current tax year will qualify for a deduction. You cannot carry these amounts over to subsequent tax years, even if you have a credit card or bank account statement showing your contribution. The tax deduction is available only in the year that the donation was made.

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.topicinfo.com

Angelina Pyrkins regularly contributes to various web-based zines, on family tree and family fun subjects.
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