Like most of the nation, my family will gather this week with our extended clan to share a meal and a laugh or two.  Thanksgiving is also a time to take a moment to consider those who are not so fortunate.

If you turn those good thoughts into good deeds, your charity might be eligible as a tax deduction.  Uncle Sam put together a useful guide on Year-End Donations.

Cash and Stock

If you give money to your favorite charities, you can usually deduct the amount donated on Schedule A (Itemized Deductions) of your 1040.  There are some limits.  See IRS Pub 526, Charitable Donations, if you have questions.

If you have stocks (equities) that have appreciated in value, donating them instead of cash can mean a bigger tax deduction for you.  See my post earlier this year on this subject.

Used Clothing and Household Goods

The Salvation Army and Goodwill Industries have offices nationwide.  Personally, Goodwill gets my donations, since the Salvation Army discriminates against LGBT folk (hence the lack of a link to it in the preceding sentence).  In many states, the Vietnam Veterans of America will come to your house to pick up your donations, including small pieces of furniture.

You can deduct the fair market value of donated used clothing and household goods.  The IRS Publication 561, Determining the Value of Donated Property, is a starting point, but Goodwill’s guide to valuation is more direct.

Volunteering

Volunteering your time is the greatest gift you can give.  Whether you choose to work with children, seniors, or community organizing, nothing can replace the gift of your experience, energy, and enthusiasm.  Unfortunately, you cannot take a tax deduction for the value of your time.  You can deduct mileage for driving to the place where you volunteer.

However you choose to celebrate this week, best wishes for a happy holiday season.

Related posts: Charitable deductions warm you twice

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Image credit: HowardLake at Flickr

You can claim the cost of your child’s summer camp as a dependent care expense if:

• the camp is essentially providing child care so that you and your spouse can work (or look for work),
• it is a day camp (sleepover camps are considered a luxury), and
• the child is under 13.

You can claim expenses of up to $3,000 for one child or $6,000 for two or more children. Continue Reading »

About a month ago, I posted on the tax deductability of the excise tax paid on cars in Massachusetts.  Over 50 folks have read this post.  Maybe everyone already knew about this deduction, but let’s say that it was new to half of them.  The average car is worth, perhaps, $10k, and at an excise tax of $25/$1k, that would be a $250 deduction.  Assume a 25% marginal tax rate, and that post might have saved the readers over $1500.

Hey, that’s some good!

Let me know if this was a new deduction for you.

In Massachusetts, you may be able to deduct your FastLane tolls and the amount you paid for MBTA weekly/monthly passes to commute by rail, bus, or boat.  Continue Reading »

In Massachusetts, excise tax paid on cars is deductible.  The registration fees paid to the state are not, but the excise tax paid to your town/city is.  The excise tax is $25 per $1000 of the car’s value, based upon the original MSRP and a factor that decreases with time:

• In the model year 90%
• In the second year 60%
• In the third year 40%
• In the fourth year 25%
• In the fifth and succeeding years 10%

Since the tax is based on the value of the car (and not the weight or other criteria), the Feds allow you to claim it it as personal property tax deduction on your Schedule A.

Now is a great time to refinance your existing mortgage, if you can.  Rates have fallen significantly in the last few months, so if your credit is still good, you’re still employed, not planning on moving soon, and you’re not underwater (have positive home equity), you can save a few bucks. Continue Reading »

Standard mileage rates were increased in 2008 due to economic factors including the high cost of gasoline. The 2008 for business use of your car is 50 ½ cents/mile (58 ½ cents/mile after June 30, 2008). The 2008 for the use of your vehicle to get to medical care or to move is 19 cents/mile (27 cents/mile after June 30, 2008). If you drive to and from volunteer work, you can take the actual cost of gas and oil or 14 centers/mile. If the volunteer work was to provide relief related to a Midwestern disaster area, the amount is 36 cents/mile (41 cents/mile after June 30, 2008). For charitable work, you can deduct parking and tools, if you were not reimbursed for these expenses.

IRS Pub 1040 Instructions, p. 6 and IRS Pub Schedule A Instructions p. 7.