In a recent article with tips for last-minute savings on the tax bill, CNN Money suggests qualifying for a deduction by giving to charity. Donations given to a tax-exempt organization can be deducted from your income when filing your taxes. There’s a catch, though. If your total deductions including the charitable contribution don’t exceed the standard deduction, then there is no tax benefit to giving the charity.
Of course, a tax deduction should not be the impetus for making decisions about giving to organizations. The decisions should be based on your support of the organization’s mission. The article provides some details on what is necessary if you can take the tax deduction.
If you make a cash donation, you have to substantiate it with a letter or receipt from the organization, a cancelled check or a bank statement showing the donation. Any documentation must include the name of the charitable organization as well as the date and amount of the contribution.
The new rules for the IRS stipulate that this support must be included when filing your taxes. For those of us who file electronically using online software, like TurboTaxOnline or TaxAct, it’s unclear how to transmit these receipts or letters. I suppose they must be sent to the IRS under separate cover.
7 Year-End Tax-Saving Moves [CNN Money]
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If you have kids, you can sock away some into an IRA for minors.
There’s a few catches though but still worth a check. Found the info on MyMoneyBlog but the original link is below.
http://www.fairmark.com/rothira/minors.htm
I’d be really surprised if we have to submit the receipts for smaller charitable contributions to the IRS with our tax form. I understood the rule to mean that whereas before, you did not substantiation in the event of an audit, now you need to have the back-up if you’re audited.