what if you give charity to poor people at the gas station who clean your car windows and you give them money, how can you document that properly to the irs?
2007-06-20 15:16:26 · 13 answers · asked by beach_babe971 2 in Business & Finance ➔ Taxes ➔ United States
You can't. You can't give money to an individual and get a deduction for it, money donated that way is considered to be a gift, and gifts are not tax-deductible. You can give money to a charity who would give money to those people, and get a deduction on your Schedule A - Itemized Deductions, under Charitable Contributions. You never get a tax exemption for giving to charities. And the tax deduction is only good if you itemize rather than taking the standard deduction.
2007-06-21 01:31:24 · answer #1 · answered by Anonymous · 2⤊ 0⤋
A charity is a tax exempt organization only if they've been officially approved. If you donate to the Leukemia and Lymphoma Society then you can "write off" the donation as in a tax deduction.
Those poor people at the gas station? They are not a charity. A person is not a charity. For example. My daughter has cancer. She is not the charity, however we do have a legitimate non profit account for monies donated in her name. It's called the SJM Fund. Unless the IRS can find the person and account for the funds then you are likely not going to get the "write off."
This said, they are poor and if they do a job for you they deserve to be paid. They are asking for whatever you think is appropriate. At least they are willing to provide a service to you and you should not feel bad about paying them for that service.
2007-06-20 15:24:37 · answer #2 · answered by Emmah 4 · 1⤊ 1⤋
There are no charities that are a tax exemption - if you support your wife/children/mother/father - those are examples of exemptions - Your charities are tax deductions - if you can document your support for a charitity w/a receipt - you can deduct a percent allowed (usually 3%) from your taxes - however, that amount is limited by your gross earnings - you're only allowed to deduct a portion of adjusted wages/earnings. Get real - if you want to add up casual donations of dollars here and there for a window wash or change in a hat - keep a log w/date & time & amount and take it with you to an IRS audit.
2007-06-20 16:32:26 · answer #3 · answered by Judge Julie 7 · 0⤊ 2⤋
As many have already said, giving to a *person* in need is not deductible.
If you wanted a tax write-off, find a local *charity* that serves people in those situations and donate to the charity. Those charities are exempt from taxes and receive the privilege of having contributions as tax free because they are structured specifically to benefit a group of persons and not any *one* particular individual.
2007-06-20 18:52:06 · answer #4 · answered by John B 2 · 0⤊ 0⤋
In Canada, and I assume it is the same there. If you contribute to a registered charity you can deduct that from your income somewhere.
Charities on the other hand, are legal entities not unlike a person or company, that have some special tax status (usually tax exempt).
Again I am not an expert on American tax, but generally that is how it works most places.
2007-06-20 15:22:56 · answer #5 · answered by Mark S 2 · 0⤊ 1⤋
There has been a tax law change that all charity deductions have to have a receipt now. Besides, giving money to a homeless person has never been a tax deduction, it is just an act of kindness.
2007-06-20 15:24:19 · answer #6 · answered by kny390 6 · 1⤊ 1⤋
Giving money to a poor person is not deductable. You must give the money to an exempt organization.
In your case, you paid the person for doing a service.
2007-06-21 00:33:52 · answer #7 · answered by Steve 6 · 1⤊ 0⤋
Donations to individuals aren't deductible. To be deductible, a contribution must be given to an IRS-recognized charitable organization. Even then, if you designate your contribution to go to a particular person or family, it isn't deductible.
So for the money you give that you describe, there's no point in trying to document it - it's not deductible in any case.
2007-06-20 15:46:43 · answer #8 · answered by Judy 7 · 1⤊ 1⤋
Deduction.
Expenditures may be deductible but cannot be exempt.
Income may be exempt but cannot be deductible.
Credits are applied against the tax itself, reducing the tax liability dollar for dollar.
Refundable credits, such as the EITC, the earned income tax credit, are refundable in cash by the IRS even if the recipient owed no tax against which the credit could have been applied.
2007-06-20 15:21:18 · answer #9 · answered by Anonymous · 1⤊ 1⤋
You can not deduct it unless it is a legitimate charity, a registered organization. Although giving $$ to poor people and homeless is a nice thing, it is no different than giving money to friends. Not deductible.
2007-06-20 15:20:56 · answer #10 · answered by Pook 5 · 2⤊ 1⤋