|
Updated: 11:28 PM Dec 1, 2008
On the Money: Donations and Deductions
Here's advice on how your charitable giving can give back to you come tax time.
Posted: 10:48 PM Dec 1, 2008Reporter: Sarah Stokes Email Address: sarah.stokes@weau.com |
|
To see other "On the Money" reports click here.
It's been called the season of sharing and charities are hoping that's what you'll do so they can help people. But did you know your donations can come back as a gift to you?
In tonight's On the Money report, we look at what you need to do so you can reap the full rewards of your generosity.
When you give, you may not expect more than a thank you, but the IRS has an income incentive, if you itemize.
"If you give $100 and depending on the tax bracket, most peoples' is 15 to 28%, then you'll get $15 to $25 added to your refund," Glen Johnson says. Johnson, a tax preparer and financial manager with Johnson, Gunderson and Runkel says you can deduct your donations if you meet the standard deduction rate.
It's $10,900 for a married couple filing jointly, $5,450 for a single filer and $8,000 for a head of household this year. To see next year's rate, click here.
Johnson says, "add up all the items that are allowable. Medical expenses, interest expenses, real estate and income taxes, those kinds of things, charitable contributions, those are all deductible, add those and see if you're over the standard deduction level, if you are that's a benefit for you to keep track of those things."
He says there are a few rules when it comes to deducting your donations. First, it has to be an IRS recognized non-profit.
To see a list, Click here.
Then... Keep track!
Johnson says you "should always get a receipt because the IRS will require that."
He says coins in the kettle won't work, as the IRS is more strict in recent years, but if you write a check instead, that will count as your receipt. He says things get a bit more tricky when it comes to clothing and household stuff. He adds, "they will not put a value on it for you, so put a value on it yourself, usually a garage sale value."
But if you unload a bunch of stuff, make sure you've made a list.
"You need to keep an itemized list in case of audit, if it goes over $500 another form will be required."
That means write down everything, each pair of jeans, jacket, shirt and so on. Johnson says you won't send that list to the IRS, but you need to keep it as proof, for at least 4 years.
If you do a payroll deduction like an automatic contribution to United Way for instance, he says your payroll department will have your proof. And your place of worship may also help when it comes to what you put in the offering plate, "a lot of churches keep track of that, because people will get their weekly envelopes and things and that way you'll have your numbers."
Johnson says raffle tickets do not count. And if you make a big donation, worth more than $5,000, you need to get it appraised in order to deduct it. If you don't itemize, your charitable giving is just that. But you can feel good about your gift!
- Semi, car crash in Hallie Friday morning
- Wisconsin to use part of mortgage settlement for budget
- Gas price investigation
- UPDATE: GOP Senate leader says 3 recalls will proceed
- Obama: Birth control policy meets everyone's needs
- Democrats say GOP recall challenges won't stand
- Assignment 13: Could Wisconsin interstates become tollways?
- Evers upset with Walker over education bill
- CRIME ALERT: License plates stolen off cars in Eau Claire
- Walker, Van Hollen want to use settlement money for budget
- Catholic Institutions required to offer free birth control
97 Comments - Wisconsin's budget condition worsens
67 Comments - Democrats say GOP recall challenges won't stand
62 Comments - Wisconsin to use part of mortgage settlement for budget
56 Comments - Obama: Birth control policy meets everyone's needs
52 Comments - Source says Obama will free 10 states from No Child Left Behind law
47 Comments
