Special Rules for Car Donations |
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Beginning in 2005, Congress has imposed some tough new rules that will substantially limit the deduction for this popular charitable donation. Prior to this change, taxpayers were generally allowed to deduct the fair market value (FMV) of the vehicle.
What is a Charitable Organization? |
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Money or property that you donate to "qualified" charitable organizations can be included in your itemized deductions as a charitable contribution. But what is a "qualified" charity? IRS Publication 78 lists all qualified organizations.
Charitable Away-From-Home Travel |
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Charitable deductions are allowed only for travel expenses (meals and lodging included) by volunteers who do charitable work for their organization while away from home on the charity's behalf. Unlike other areas of taxes, meals are not subject to the 50% limitation. Any "significant element of personal pleasure" negates a deduction (i.e., not even partial deduction is allowed).
Tax Breaks for Charity Volunteers |
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If you volunteer your time for a charity, you may qualify for some tax breaks. Although no tax deduction is allowed for the value of services performed for a charity, there are deductions permitted for out-of-pocket costs incurred while performing the services. The normal deduction limits and substantiation rules also apply.
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