Donating money to help reduce the federal debt is one of the more unusual charitable tax deductions. It's also today's Daily Tax Tip.
Long-time readers know I have blogged about this before, but the federal deficit is getting more attention nowadays, thanks in large part to a group of Senators and Representatives for whom stanching the flow of the country's red ink is paramount.
These members of Congress don't want the federal government to raise taxes to help reduce the ever-growing national debt, which as I type is $16,784,854,240,304. Check out USDebtClock.org to see how much it has already increased.
But if you personally want to go above and beyond the amount you already pay to Uncle Sam to specifically help him pay down what he owes, you can send an additional amount to the Bureau of the Public Debt.
Yes, it's a real government office, located in Parkersburg, W.Va. And no, I don't know how much it costs to keep the Bureau of the Public Debt operating.
And yes, if you do give extra to help pay down the public debt, it's considered a tax-deductible charitable contribution.
How to hand over more to Uncle Sam: You have two ways to make a contribution to reduce the public debt.
You can make a contribution online either by credit card or direct debit from your checking or savings account at Pay.gov.
Click the Treasury Direct image to go to the online debt contribution website.
Or you can write a check payable to the Bureau of the Public Debt. In the memo section, note that it's a "Gift to reduce the Debt Held by the Public." Then mail your check to:
Attention: Dept. G
Bureau of the Public Debt
P.O. Box 2188
Parkersburg, WV 26106-2188
Whichever way you choose to donate to the U.S. Treasury, be sure to follow the regular charitable giving tax rules, including getting a receipt.
And remember that donations are tax deductible only when you itemize.
President's nondeductible donation: Among those giving back more money than they have to is the president.
Obama has announced that he will return 5 percent of his $400,000 annual White House salary in a show of solidarity with federal employees who have or soon will be facing unpaid furloughs as part of sequestration.
Those approximately $1,667 monthly payback checks, however, won't do
the prez any good next tax-filing season. The White House also made it
clear that he's not going to count the $20,000 that's he's
returning to the Treasury as a charitable deduction.
Atlanta-based CPA Jay Starkman told the Wall Street
Journal that if Obama did deduct the full amount he returns, "his net out-of-pocket would only be about $11,900."
Starkman, who is also a tax historian, also told the WSJ that President Herbert
Hoover remitted 20 percent every pay period in solidarity with federal workers
who were suffering pay cuts during the Great Depression.
To avoid the
questionable constitutionality of the move, Hoover had Congress pass a
provision in 1932 that legally allowed the rebate.
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