Income Tax question.?

Question

I want to donate the stuff I do not need, some still have a price tag on. One of my friends said I can donate up to half of my income, for tax deductible at the end of the year. Is that true? Is it a limit for the deductible?

Answer 1

There are 3 different limits for charitable contributions. The one that will most likely apply to you is the 50% limit of your adjusted Gross Income. For the items with the price tag still onlthem, are they still in new condition and did you purchase them this year? If so, then you can probably write off the full value of the item. However, if you did not purchase them this year, then you will need to use the fair market value of the item.

Read IRS Publication for more deatils. A link is below.

Answer 2

That is the limit for what you can deduct. But you also have to prove that you actually gave that much to take the deduction. If you deduct used goods, even if they still have the price tag on them and were never really used, the value you can deduct is almost always much less than your purchase price. If you are donating clothes or household goods, both the Salvation Army and Goodwill websites have guides to values that you can use to figure your deduction. If your deductible amounts totalled over half of your income, then you would carry over the extra to the following year's tax return. Unless your income is very low, probably too low to pay taxes in the first place, I doubt that you will donate enough to run into the limit.

Answer 3

There is indeed such a limit, so your options are to give everything away at once and carry the excess over to next year, or spread the donations out over more than one year. The IRS will frown on you if you try to deduct the price tag value of an item; the actual value is less. You could probably justify half the price tag if the item is in new condition.

Answer 4

First off, unless this person ITEMIZES HER DEDUCTIONS on her income tax form, she CANNOT take the charitable contributions off her income tax forms... Charitable deductions are part of your SCHEDULE A Itemized Deductions... you must have PROOF of anything donated over $250.... by proof I mean a receipt of the fair market value of the goods donated FROM the organization they were donated to.... Example---CLOTHES donated to Salvation Army valued at $600 ---you would have to produce a receipt or LETTER from the Salvation Army stating the value of your donation. You THEN would take a PERCENTAGE of those donations and that figure would be added into your itemized deductions on your income tax return.....

Answer 5

Go to www.irs.gov or maybe its www.irs.org. One of them is the Irs direct and they will answer all your questions. Probably carry on a chat with you if you want to pursue more questions with them. That's what I would do and it's free.