Deductive Thinking
Maybe you're taking an exploratory peak at your income tax return and trying to see whether all those fiscal cliff shenanigans really ended up saving or costing you money. Either way, I suspect you could use another deduction.
I'll start with the premise that many of us spend a considerable amount of time working for the charitable and non-profit organizations that make living around here a special thing. We write them our checks, which we routinely report on Schedule A, but we probably also make significant donations of our goods and services that are also worth toting up. That is, if we drove in furtherance of the organization's work, we can deduct $.14 per mile for those trips (if we can reconstruct exactly when and where we went, of course). If we donated something to one of their auctions (wine, tickets, artwork), we can deduct its fair market value (but we need something to establish that - most organizations provide that verification). Even if we donated flowers or decorating materials or refreshments for, say, the Peterborough Players spectacular auction (one of the area's great annual events!), we can write off the cost of those if we kept our records. Unfortunately, although our time is always the most valuable contribution we make, the IRS assumes we'd fudge those figures, so they just say, no dice, whether we can prove all those hours or not.
If the deductible amounts add up to less than $500, we don't need to file anything extra to claim the deductions - just keep our records in case someone at the IRS doesn't have enough to do. If we want to claim more than that - maybe you gave public radio your VW bus with the peace sign - we can certainly do it, but there are other forms to file and appraisals or certifications of value to get. Check the instructions for the details.
The point, though, is that we shouldn't quit doing our good deeds for all those organizations that count on us, but we don't need to shoot ourselves in the foot either. It won't cost the organizations anything for us to claim the in-kind deductions we're entitled to, and that will leave us with more to give them in cash!
Posted 02/22/2013
I'll start with the premise that many of us spend a considerable amount of time working for the charitable and non-profit organizations that make living around here a special thing. We write them our checks, which we routinely report on Schedule A, but we probably also make significant donations of our goods and services that are also worth toting up. That is, if we drove in furtherance of the organization's work, we can deduct $.14 per mile for those trips (if we can reconstruct exactly when and where we went, of course). If we donated something to one of their auctions (wine, tickets, artwork), we can deduct its fair market value (but we need something to establish that - most organizations provide that verification). Even if we donated flowers or decorating materials or refreshments for, say, the Peterborough Players spectacular auction (one of the area's great annual events!), we can write off the cost of those if we kept our records. Unfortunately, although our time is always the most valuable contribution we make, the IRS assumes we'd fudge those figures, so they just say, no dice, whether we can prove all those hours or not.
If the deductible amounts add up to less than $500, we don't need to file anything extra to claim the deductions - just keep our records in case someone at the IRS doesn't have enough to do. If we want to claim more than that - maybe you gave public radio your VW bus with the peace sign - we can certainly do it, but there are other forms to file and appraisals or certifications of value to get. Check the instructions for the details.
The point, though, is that we shouldn't quit doing our good deeds for all those organizations that count on us, but we don't need to shoot ourselves in the foot either. It won't cost the organizations anything for us to claim the in-kind deductions we're entitled to, and that will leave us with more to give them in cash!
Posted 02/22/2013