2006-07-17 10:36:58 · 6 answers · asked by John H 1 in Business & Finance ➔ Taxes ➔ United States
The donations must be made to a non-profit (usually 501(c)(3) organization. That lets the donor take a take a deduction. The forms and application to become a non-profit plus the fee charged by IRS the first year make this very time consuming and costly.
Many communities and states have foundations established for exactly this type of activity. The donors make payment to the foundations which in turn invest the donations and pay scholarships from the earnings. The scholarships can have restrictions such as based only on need, GPA, or only from your community.
The foundations are non-profit so the donors get a tax break. Check out community foundations in your area.
2006-07-18 07:31:19 · answer #1 · answered by Anonymous · 1⤊ 0⤋
Is your organization non-profit? If it isn't, then you need to get your accountant to set the fund up so that it is. After the fund is set up right, the contributors will have no difficulty deducting contributions from their taxes. Well, ok, no difficutly except that they have to go long form instead of standard deductions and their contributions have to be more than a certain percentage, blah blah, blah.
Honestly, the people that are really able to use the contribution as a deduction will already know what to do in order to deduct it. Most Americans really wouldn't be able to use the deduction anyways.
2006-07-17 17:42:04 · answer #2 · answered by wanda s 2 · 0⤊ 0⤋
To make sure that the contributions, you should request a 501(c)(3) ruling from the IRS. There is a user fee. Use IRS form 1023 located here: http://www.irs.gov/pub/irs-pdf/f1023.pdf
It's a very long form and you should consider using a tax attorney to set it up if the scholarship fund will collect a lot of money.
2006-07-17 19:53:41 · answer #3 · answered by taxmannyc 3 · 0⤊ 0⤋
As long as your organization is a not for profit you would need to produce receipts to the people who donate. If your organization is not a Not for profit there could be an issue. In order for it to be tax deductible you need to file accordingly on your tax papers.
2006-07-17 17:42:20 · answer #4 · answered by scalegoddess2000 2 · 0⤊ 0⤋
You have to set up a non profit. google non profit or go to the library there are some books as to what you have to do. Also have to go through the IRS
2006-07-17 17:41:01 · answer #5 · answered by pappa_15 3 · 0⤊ 0⤋
I think that you just need a receipt. Ask your HR department.
2006-07-17 17:41:23 · answer #6 · answered by Only_my_opinion 4 · 0⤊ 0⤋