Here is the link to our free donation tracker!
Photo by Sarcasmette on Flickr.com
Good afternoon everyone. Being my first official blog post, I would like to start off by formally introducing myself—my name is Michael Siebert and I am a recent graduate of the University of Missouri – St. Louis. I have a bachelor’s degree in Business Administration with an emphasis in personal finance. My affinity for taxes began when I was a volunteer for the Volunteer Income Tax Assistance Program also known as VITA back in 2010. One day in November 2011, in search for a tax preparation job, I typed in “St. Louis Tax Preparation” in the Yahoo search bar. I saw Roberg Tax Solutions as the first link and decided to click and explore. I clicked the “Contact Us” tab at the top and thought, “Well, I guess I’ll give this a try, but no one answers these things anyway so probably nothing will happen.” In less than a day, I received a heartfelt reply email from Janice Roberg. I then thought out loud, “This person really cares about people and their well being. If she responded quickly to me, she must respond punctually to everyone else.” And believe me, she does.
We set up a day for lunch, conversed, and from that moment on, I was determined to work for her. So in the beginning of 2012, I worked for Roberg Tax Solutions part time while working another full time job—to get my feet wet in the compensated tax prep world. It is now 2013, I am a full time employee, and I could not be happier. Jan’s dedication to her business, her ability to empathize with clients, and determination to grow are just few of the many facets that make work enjoyable. I am truly happy to come into work every day.
Alright, enough sucking up. Let’s get to our topic of charitable giving. Above is a link to a donation tracker that I made which is free for you to use, disburse amongst your friends and family, or even frame and display in your office if you’re into that sort of thing. Kidding aside, I am pretty good with Excel but definitely not a guru. If you see any problems or improvements feel free to leave a comment. It includes a fair market guide for used items which can save you some research time. It also includes important little tidbits of information, useful links, and the record keeping requirements for charitable contributions.
Charitable contributions go on your Schedule A if you itemize deductions in place of your standard deduction. The 2012 standard deductions are:
- Singles: $5,950
- Married Filing Jointly or Qualifying Widow(er): $11,900
- HOH: $8,700
The 2012 additional standard deductions for people age 65 or older, legally blind, per person, per event are:
- MFJ, QW, MFS: $1,150
- Single or HOH: $1,450
Are Your Contributions Eligible to Receive Tax-Deductibility?
Use the IRS online search tool, Exempt Organization Select Check: www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check. Or call the IRS at 1-877-829-5500.
Contributions made by cash or check go on line 16 of your schedule A. Boring. Out-of pocket expenses incurred in performing volunteer work for a charitable organization (including the charitable mileage deduction) are also considered contributions. If you are reimbursed by the organization, you cannot deduct them on your schedule A. No double dipping—unless you’re with your friends and the dip is good. The charitable standard mileage rate is 14 cents.
Contributions that Benefit you—Mr. or Mrs. Taxpayer
If you receive a benefit for a charitable contribution, your deduction is reduced by the value of the benefit received. As much as I would love to provide examples of this, I have to keep you awake a little while longer to finish reading.
Contributions of Property and One of My Favorite Tax Forms, Form 8283
Yes, I like tax forms. Jan thinks I am an extreme nerd because of this and she’s probably right.
Contributions of property are reported on line 17, Schedule A. (Mike, nobody cares about where it goes because the software will take care of it!) The deduction is generally equal to the fair market value of the contributed property.
An important and common planning tip: If the fair market value of stock is less than what you paid for it, you could sell the stock, recognize the capital loss, and then donate the cash to the charity rather than give the stock directly to the charity. This reduces your tax liability more so than if you were to donate the stock directly.
Form 8283 Noncash Charitable Contributions is required when the total value of your noncash contributions exceeds $500. The four methods of evaluating fair market value are the appraisal, thrift shop value, catalog, or comparable sales method. Most people use the thrift store value for common household goods. You have to have the Donee tax identification number, the donee street address, the property description, the physical condition, the date acquired, date contributed, your cost, and the item’s fair market value. They should give you a receipt verifying your donated property that acts as proof for your donation. Isn’t this stuff fun?
Charitable Contributions Deduction Limitation
The total deduction for all charitable contributions is limited to 50% of the taxpayer’s AGI. Charitable contributions in excess are carried forward for up to 5 years. There are also 30% and 20% AGI limitation rules that I will not delve into here.
Donating Your Car
You must obtain written acknowledgement from the donee organization, which includes details on the use or disposition of the vehicle by the donee organization. A copy of the written acknowledgement must be attached to the tax return. Check out http://www.irs.gov/pub/irs-pdf/p4303.pdf for more information.
To those of you who made it this far, thank you for reading. I look forward to writing more blog posts in the future as my skills and knowledge increase. But remember, the intrinsic value of the donation will always exceed the dollar amount of tax saved. You should feel good about helping needy families!
Here is the link to the donation tracker again.