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Tax Tip of the Week
For the week of
December 22, 2003

Feeling charitable? Review the tax rules

As the holidays approach, you're probably going to give a little extra to your favorite charity. If you itemize deductions, your kindness may bring you an extra reward in the form of a tax deduction. For some time, Congress has been considering new legislation that might extend that reward to nonitemizers.

The proposed changes Congress has been talking about would allow all taxpayers at least a partial deduction for charitable gifts. They would also include tax-free withdrawals from IRAs to fund charitable contributions and relaxed rules for business contributions. It's impossible to say what form the final legislation might take or when it might take effect. Meanwhile, here's a short list of reminders for this year's charitable deductions:

  Make sure the organization qualifies for a deduction. Remember that contributions to civic groups, unions, chambers of commerce, and political candidates usually don't qualify. If in doubt, check IRS Publication 78 which lists all qualified organizations. It's available online or at many libraries.
  Obtain a written acknowledgment for any cash donation of $250 or more. You must have this in your files before the date you file your return.
  If you donate property, make sure you claim a realistic value. Some major organizations, such as the Salvation Army, publish a valuation guide for used items on their Web sites. You'll need an appraisal for any item valued above $5,000.
  Don't forget to deduct your mileage and other expenses for charitable work. Track your mileage and claim 14 cents a mile in 2003.

Click here to view previous tax tips.

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