I would very much prefer the $25K to go to a specific charity (in a form of a tax-deductible donation) rather than to vanish in the bottomless pocket of the IRS. Any idea if this would be possible? PLEASE DO ME A FAVOR AND ANSWER ONLY IF YOU KNOW. DO NOT GUESS.
2007-10-20 13:20:03 · 8 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
No you can't. First of all, any contribution saves taxes at most, and maybe less than, the amount of your contribution times your tax bracket. The whole amount does not come off your taxes. If you contribute $25K and can deduct that much (there are limits), the most you could save in taxes is $8750, and only then if you are in a 35% tax bracket.
If the tax is for a prior year, then you can't affect your tax liability for that year at all, since a contribution is not deductible for a prior year.
2007-10-20 14:15:06 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
You might make a charitable contribution for the current tax year; it is too late to make a charitable contribution for a prior year. Thus, any contribution you make now will have NO effect on the amount you own for prior years' returns.
A tax deduction is not the same thing as a tax credit. A tax deduction would only reduce your tax by some percentage of the deductible amount. it's a moot point anyway because this would do you no good at all now with regards to your present tax liability.
You may be able to set up an installment agreement with the IRS and pay back the tax liability over time. I have found the IRS to be very good at this and one of the cheapest sources of retroactive financing you can get.
2007-10-20 13:26:25 · answer #2 · answered by Anonymous · 1⤊ 0⤋
No. If you give to a charity today, it may be a deduction for 2007 taxes, but not for past years for which you owe money. No, I don't guarantee this is 100%, you need to ask an accountant, a tax lawyer, or the IRS to be sure. Good luck with that.
2007-10-20 13:25:25 · answer #3 · answered by Crystal 4 · 0⤊ 1⤋
You are free to make a contribution to charity, but it will not reduce taxes from a prior year. It will reduce taxes in the year of the donation.
If you owe $25K for the current year and you donate $25K to charity, you will not eliminate your taxes, only reduce them by up to about 8K or 9K. You would still owe the remaining $16K or so.
2007-10-20 15:01:57 · answer #4 · answered by ninasgramma 7 · 2⤊ 0⤋
This is not your call. If you owe taxes to the government that is the way it is. Don't forget, IRS just collects the month, it does not keep it/ Your taxes are what you owe to the other 300,000,000 people in the country for the privilege of living here.
2007-10-20 14:36:35 · answer #5 · answered by Anonymous · 1⤊ 0⤋
If the tax you owe is from a prior year, its too late to make an offsetting deductible donation for that year.
2007-10-20 13:24:19 · answer #6 · answered by Anonymous · 2⤊ 0⤋
No. You can submit an offer in compromise to the IRS and if they accept your offer you can then donate the money to a charity.
2007-10-20 13:30:54 · answer #7 · answered by Nicole E 1 · 0⤊ 0⤋
Unfortunately no. If you owe the IRS money from a previous tax year, you have to pay them directly to clear it.
2007-10-20 13:26:06 · answer #8 · answered by Cysteine 6 · 3⤊ 0⤋