Is your email box as flooded as mine today with pleas for money from charities?
Those nonprofits know that today is the last day that we can donate if we want to claim the gift as an itemized charitable deduction on our 2012 tax return.
Even the youngest have the giving spirit. Photo courtesy Bart Everson via Flickr Creative Commons.
This could be particularly important to higher income folks if we go off the fiscal cliff and prior tax laws returns. In that case, the limitation on all Schedule A deductions, including gifts to your favorite charity, could be limited.
I don't expect that to happen, or I guess I should say I don't expect the limitation, known as the Pease deduction phaseout after former Ohio Democratic Rep. Donald Pease (D-Ohio)
who pushed for the law in 1990, to stick around for long in 2013.
Even if we go over the cliff or down the slope or whatever name you want to give to this legislative idiocy at this point, the 113th Congress will likely rescind most of the briefly returning tax laws quickly after convening on Jan. 3.
But I digress.
For most of us who itemize, giving to our favorite charity is a good way to help those who are less fortunate. And if we follow the Internal Revenue Service's rules on charitable donations, we'll feel good all over again when we do our taxes.
Here's the quick outline of what to do today, as noted in the final Weekly Tax Tip of 2012.
First, don't miss
the Dec. 31 deadline if you want to claim the itemized charitable
deduction on this year's tax return.
Make sure the group to which you
give is a qualified charity
per the IRS guidelines.
Be aware of special rules
for different types of gifts. The deduction value of a vehicle donation, for example, depends in large part on how the charity uses the vehicle. And
any household goods you give must be in good or better shape.
Finally,
be sure you get a receipt.
In most cases you won't have to submit the gift documentation with your tax return, but if
the IRS ever questions your donation you'll need it to prove that your
deduction was legal.
So now that you know the rules, get out there and give to the good cause
of your choice.
Remember, too, that if you write a check or make your gift
via credit or debit card by Dec. 31 it still counts as a donation this
tax year even if the financial gift shows up on your January credit card or
bank statement.
And just to bring this back to the ongoing (and ongoing and ongoing and …) fiscal cliff debate and our growing federal deficit, if you're so inclined to help Uncle Sam get out of debt, you can make a tax-deductible contribution to the Bureau of the Public Debt.
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