Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Tax Deductions and other Taxes topics.
One of the prime ways tax-savvy individuals net themselves a tax cut is through charitable donations. Sure, giving to a charity is an altruistic act. People make donations to help others. That doesn't mean you can't help yourself in the process. If you donate cash or goods and services to a qualified charitable organization or drive on behalf of a charitable organization (to volunteer at their location, for example), you can claim these as personal tax deductions on your income tax return. There are several changes regarding charitable donations for tax year 2005, some driven by the aftermath of Hurricane Katrina. For example, cash contributions made after August 27, 2005, are not subject to the 50 percent adjusted gross income limitation and don't phase out for high-income taxpayers. Also, the mileage rate to provide services to a charity that assisted victims of Hurricane Katrina is $0.34 per mile. For all services to other charities, the mileage rate is $0.14 per mile. But remember to document those miles and keep any and all records of donations whether in the form of cash or goods and services.
|Jennifer Mathes, Ph.D.|