The IRS Deductions Blog

Posts Tagged ‘donation’

Question: About tax deductible?

I am a self employed individual in Alberta Canada and i am curious as to what is considered deductible. i make roughly 60,000 per year and calculated (hopefully generously) that i should save about 20,000 by year end for taxes.

If i were to make a contribution of say 6,000 dollars to an rrsp would i then only owe 14,000 in taxes or would i pay taxes on 54,000 dollars for the year? As well information on what else is tax deductible (besides vehicle expenses i think ive got that covered) would be greatly appreciated
Also i will be collecting about $2500 monthly in living out allowance so how will that affect my taxes

Answer: 1) Regarding RRSP’s they reduce your taxable income (vs taxes owing)

2) Regarding the living out allowance any excess over a reasonable amount should be included in your income. Per T E (first link) a reasonable amount is $65 per day.

I’m not sure whether you worked at this location for the full year so I won’t fill in the numbers but your taxable income from the items mentioned in your question will = 60,000 + (2,500 x # of months) – ($65 x days) – RRSP contribution

I would recommend using Taxtips.ca calculator to get a rough estimate (2nd link) of your taxes payable.

Edit: To answer your original question I do not think there is anything else you’ll be able to deduct in relation to your employment.

Items on Amazon Right Now for Tax Deductible Self Employed:

How To Make Being Your Own Boss Less Taxing

The tax code offers numerous breaks for the newly (and the veteran) self-employed.

Self Employed Online Tax Deduction Tips for 2009, 2010

Question: Can I claim a 2008 tax deduction for a car that I donated in 2007?

I had the charity letter stored away and completely forgot about it when filing my 2007 return. Is it too late?

The value of the donation is $500.

Answer: No, the only way to claim it is to amend your 2007 return. For a $500 deduction, if you’re in a 15% bracket your tax savings would only be $75, so don’t pay someone $100 to amend your return if you’ll only get $75 by amending. And if you didn’t itemize, you don’t get anything anyway so just file it back away, or toss it out.

Items on Amazon Right Now for Tax Deduction For Car Donations:

Volunteers/Donations Needed, 11/21

Girl Scouts Girl Scouts of Colorado needs volunteers in Denver County. Adults can volunteer to lead a troop through their Girl Scout leadership experience or assist with events, camps or in the office.

Car Donation Tax Deduction- Does it really work?

Question: What type of donations are LEGALLY tax deductable?

Please kindly advise the type of donations to charity that are tax deductable? I’m thinking of donating a used car and some used clothes and used computers. Are this deductable. And what will i get on the deductions? Will i get the current value?
Also please tell me what else we do in our daily lives that are tax deductable.
Please advise.

Answer: Donations can only be deductible if they are made to authorized non-profit charities, and you need a receipt to prove it. There are literally thousands of types of Tax Deductions. You should look at what is relevant for you at the IRS website.

Items on Amazon Right Now for Tax Deduction Donation Clothing:

Rebooting the American Dream: Bring My Job Home

Rebooting the American Dream – Chapter One: Bring My Job Home!

Tips & Advice for Income Tax Deductions : Contribution Advice & Tips for Income Tax Deductions

Question: Donate a vehicle with tax deduction?

I would like to know how to donate a vehicle, and how to calculate the tax deduction (federal tax ? state tax). Who I should contact with?

I have an used car current market price is about $5000, and would like to sale or donate, but this car requires $1500 to repair if I want to sale it. I would like to know if make vehicle donation (sorry, I won’t fix the car) will be better for me.

Please don’t give me any answer like “Giving it to someone in need of a car will be a lot more charitible …” or “make you feel pretty good to help others …”, I am not in the level to give away few thousands, so please give me advice if you know anything about vehicle donation.
Thanks

Answer: If you donate the car to a 501(c)3 charity, you will get a notice from the charity telling you what they sold it for (they usually sell the donated vehicles). That amount will be your deduction if you itemize on your income taxes, , and you won’t know what it is until AFTER you’ve made the donation and they’ve sold the car. Say for example that they wholesale it for $2500 – they won’t mess with fixing it either, and won’t be able to get bluebook price for a car in need of major repairs. Wholesaling it, they’d probably be lucky to get $2500. Then your tax savings for federal taxes would be $2500 times your tax bracket. If you are in the 15% bracket that would be $375 – in a 25% bracket that would be $625 in tax savings.

MattD is wrong that you can take a deduction of the fair market value of the vehicle – that rule has changed. And since it needs the repairs, the fmv would be more like $3500 anyway, not $5000.

If you don’t already itemize, it’s likely that you wouldn’t get any deduction at all unless you are already very close to being able to itemize.

If you gave it to someone who needs a car, no matter how worthy that person was, there would be no tax deduction – donations to individuals aren’t deductible.

In most states, there would be no state tax savings since donations aren’t deductible most places.

Items on Amazon Right Now for Tax Deduction Vehicle Donation:

Support for UK museums: Public funding vs private giving

LONDON. Nicholas Serota, the Tate director who was at Frieze this week, and his peers are bracing themselves for drastic cuts in arts funding to be announced next week (on 20 October). Cuts of 25% to 30% are bound to have an impact on museums and…

Charity Navigator’s Tax Tips: Valuing Car Donations

Question: Is the gift money given to spouse/children tax deductible?

Is the gift money given to spouse and/or children tax deductible? If yes, up to what amount for the ‘Married filing jointly’ status?

Answer: No.

Gifts to individuals (regardless of who they are) have never been deductible.

Only gifts to qualified charities are deductible.

Items on Amazon Right Now for Deductible Gifts:

Salvation Army needs its own little helpers to make Christmas merry

There were long lines on the first day of registration at the Salvation Army to help Orlando families give their children Christmas presents this year.

Tax Deduction Tips : Gift Tax Basics