Everyone Loves A Cheerful Giver, even the IRS!

Yes that’s true, and the IRS encourages “cheerful” giving by permitting many reductions of income taxes for those who donate money and/or property to eligible charitable organizations.

But you need to act fast!

The year is rapidly ending and donations need to be finalized on or before December 31 in order to qualify as deductions for this Tax Year.

There is a special donation available now but expiring at the end of this calendar year:

This provision, currently scheduled to expire at the end of 2011, offers older owners of individual retirement accounts (IRAs) a different way to give to charity. An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, created in 2006, is available for distributions from IRAs, regardless of whether the owners itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible. To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Amounts so transferred are not taxable and no deduction is available for the transfer. Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.

Other Donations

PRO-TAX is also passing along these reminders from the IRS to help taxpayers plan their holiday-season and year-end giving:

• Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2011 count for 2011. This is true even if the credit card bill isn’t paid until 2012. Also, checks count for 2011 as long as they are mailed in 2011.
• Make sure the organization qualifies. Only donations to qualified organizations are tax-deductible. IRS Publication 78, searchable and available online, lists most organizations that are qualified to receive deductible contributions. It can be found at IRS.gov under Search for Charities. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even if they are not listed in Publication 78.
• For individuals, only taxpayers who itemize their deductions can claim deductions for charitable contributions.

Your PRO-TAX professional tax return preparer can help you determine easily whether you will benefit by submitting the Schedule A. Remember that you will need receipts in most cases as well as good records for things like the available deduction for miles you drove as a result of your charitable work.

Make plans now to contact your professional PRO-TAX preparer who will be glad to assist you. They will get you started early with information about gathering your important documents now that the year’s end is rapidly arriving.   You will find experts there with friendly and necessary skills to help! Call us at 1-800-809-2829, or click here for a guide to our locations.

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