'Tis Tax Time

by:Karen Sigler-Goldstein, Finance Director

It’s that time of year again…..no I don’t mean the Holidays-tax planning. I know I hear, the mumbling and grumbling and yawns but planning now will help you out come April 15th. So to make this week’s blog a little more enjoyable, perhaps you could put on some Christmas music, sip on some egg nog and read on….

While we gladly accept cash, check, credit card and even stock donations here at the United Way of Washington County, there are certain rules for claiming the charitable contribution deduction on your tax return.

• You must be able to itemize- usually if you paid interest or taxes on your home, made large charitable contributions, among others.

• You must actually donate cash or property-a pledge is not deductible until ACTUALLY paid.

• You must contribute to an organization that is a qualified tax-exempt organization-payments to individuals, political parties, labor unions, chamber of commences or business associations, for-profit schools and for for-profit hospitals, as well as the value of your time for services are not deductible.

• You must keep records of your donation-this would include a bank record or perhaps a written communication from the organization to include name, date of gift and the amount. For any amount above $250, you must have a contemporaneous written acknowledge from the organization. The acknowledgement must include whether organization provided any goods or services in exchange for the gift and if so that must be described.

• Donations of stock are usually valued at the fair market value of the property-If you contribute property with a fair market value that is less than your basis in it, your deduction is limited to its fair market value. On the other hand, If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction.

Generally, you can deduct cash contributions in full up to 50% of your Adjusted Gross Income and appreciated stocks in full up to 20% of your Adjusted Gross Income. Any excess can be carried over for five years until it is used up.

This is a very brief overview of charitable contributions. If you have any questions, I suggest contacting a tax planning professional. Now, go out there and enjoy the holidays-the parties, time with family and friends, shopping, religious activities. Tax time will be here before you know it! Oh and remember the United Way when you finally do think about your charitable gift giving. The end of the year is only a few weeks away!