I have a question about taxes and charity?

Question

I had to pay in on my taxes last year, but I doubt I will this year. I am not sure. I guess I should meet with my tax preparer before the year end? Anyway, I have given away about 1, 070 for a friend who needed help when his home burnt and the church took up an offering. I also gave him a lot of items from my home that would probably equal up to at least $250 or more. Anyway, I hope I can take that off of my taxes. I don't have a lot of money left to donate, but I would like to sponser a very needy child at school, this Christmas season. I would like to spend money on her, rather than paying into the government, if I have to pay in this year.
What advice can you give me. Thank you.

Answer 1

The only deduction you can get for donations is to a 501(c)(3) charity or to a governmental unit. So donations to church count but not to your friend directly. These rules also apply to sponsoring a child. Anything you give the child directly is not deductible.

In any case, you have to be able to itemize on Schedule A to be able to deduct charitable contributions (although some states have more flexible rules).

Hope this helps.

Answer 2

Make sure the checks that are intended to help your friend are made out to the church. The pastor or priest often has a discretionary fund that allows him to make purchases and provide funds directly to needy people. As noted, if you pay the money to a poor or needy person it is not a charitable deduction.

Similarly, if you tell your clergyman that you want to help a particular kid in the school, rather than all needy kids at the school, it would not be a deduction charitable contribution, which must not provide for the private economic inurement of any person.

In Riverside County California there was a terrible arson fire in October that killed 5 firefighters. There was a collection for them and a significant amount of money was raised. The publicity caused the IRS to release a statement that basically said if all you did was raise money for their surviving families without determining need, it will not be deductible. The funds had to be transferred to a firefighters charity based in Boise that is equipped to determine need of the widows and orphans.

Thank you for your generosity.

Answer 3

Unfortunately, I'll have to echo what has been stated here. You might start with the following links for some more specific information:

http://www.irs.gov/faqs/faq3-3.html

http://www.irs.gov/charities/article/0,,id=96102,00.html


Also, unless you have significant other itemized deductions and that will exceed the amount of the standard deduction, the tax deductibility of your gift will probably become a moot point. Nevertheless, helping someone is admirable so I hope your way towards a satisfying decision.

Answer 4

You can't deduct donations made directly to, or for the benefit of, a particular individual, no matter how worthy they are to receive donations. In order to be tax deductible, the donation needs to be made to an organization that has a 501c3 designation. But it sounds like you're using your donations wisely, to people who really need it.