There is often confusion when it comes to knowing what constitutes items that can be tax exempt or tax-deductible. Whereas, depending on your location, are a few items that are certainly easy to understand. For example, in NYC, uncut bagels are tax exempt while sliced bagels have 8.875% sales taxed as it counts as prepared food. It is not always cut and dry when it comes to charitable donations made. With this in mind, we at Mark Dicus & Company would like to elaborate on the effects of charitable donations when it comes to your taxes. When making donations, there are a few tax factors you need to consider, and they include the charitable organization and restrictions among other concerns.
What is a Qualified Charitable Contribution?
Not all charitable organizations qualify for tax-deductible donations, though most of the charitable organizations do. Looking for a 501(c)(3) designation or to search for it on the IRS website is the simplest way to know if a certain charity qualifies for a tax deductible. Generally, the qualifications for tax-deductible donations of a few types of organizations include the following list below.
– Organizations of Medical Research
– Government Agencies
– Religious and Churches Organizations
– Tax-exempt Hospitals
– Organizations of Tax-exempt Educational
– Public Supported Organizations
You can look it up or seek help from local accounting services for more information if you are unsure if a donation is tax-deductible. In order to fill out the proper tax estimate on your forms, it is important to know which organizations qualify for deductible donations, overall.
Restricted on Donations
It is important to know that there are some restrictions on deducting charitable donations from your taxes, though there should not be anything to prevent you from making a charitable donation. When your donation makes up a large part of your income, there are restrictions. Should a cash contribution exceed 50% of your AGI, a portion of it will have to carry over to the following tax year, for instance. In the event you get something in return for the donation, you cannot deduct the donations as well. Finally, when it comes to donating vehicles, usually, you will only be able to deduct the actual selling price from the charity, as there are restrictions. To ensure you are properly registering your gifts as donations, it is vital you understand restrictions and work with accounting firms. It is in your better interest to work with a notable tax accountant when determining which donations can be tax-deductible can be complex.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
Charitable donations and tax exemptions can cause confusion. When it comes to your taxes, whether individually or business, contact the professionals of Mark Dicus & Company and let our skilled, qualified experts assist you. We can help you navigate the taxes, including your charitable donations and tax exemptions and ensure your taxes are well-done. Call us today to help you with your taxes. Our professionals are also equipped to assist with accounting and consulting service to help you and/or your business’s success.