On December 3, the Internal Revenue Service issued the 2011 optional standard mileage [...]]]>

Much more information on charity volunteer mileage rates and what a volunteer can deduct is now available at SeriousGivers.org at the “What can a charity volunteer deduct?” page. Go there for ongoing coverage (comments are closed on this page).

On December 3, the Internal Revenue Service issued the 2011 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Our post and comments on the 2010 rates.

Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 51 cents per mile for business miles driven;
• 19 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service of charitable organizations.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. For more information, see our article on charitable deductions for volunteers and IRS Revenue Procedure 2010-51.

Find out more about your favorite charity by looking at its IRS Form 990 or 990-EZ.

Read the latest additions to this site.

Home.

Special Charitable Contributions for Certain IRA Owners

This provision, currently scheduled to expire at the end of 2009, [...]]]> The Internal Revenue Service provided a reminder today on the ability of IRA owners to make tax-free donations to charities. This special rule expires December 31, 2009. I’m going to quote the IRS notice in full:

Special Charitable Contributions for Certain IRA Owners

This provision, currently scheduled to expire at the end of 2009, offers older owners of individual retirement accounts (IRAs) a different way to give to charity. An IRA owner, age 70½ or over, can directly transfer tax-free up to $100,000 per year to an eligible charity. This option, created in 2006, is available for distributions from IRAs, regardless of whether the owners itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.

To qualify, the funds must be contributed directly by the IRA trustee to the eligible charity. Amounts so transferred are not taxable and no deduction is available for the transfer.

Not all charities are eligible. For example, donor-advised funds and supporting organizations are not eligible recipients.

Amounts transferred to a charity from an IRA are counted in determining whether the owner has met the IRA’s required minimum distribution. Where individuals have made nondeductible contributions to their traditional IRAs, a special rule treats transferred amounts as coming first from taxable funds, instead of proportionately from taxable and nontaxable funds, as would be the case with regular distributions. See Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions.

Extracted from IRS Newswire Issue Number: IR-2009-114

On December 3, the Internal Revenue Service issued the 2010 optional standard mileage [...]]]>

Much more information on charity volunteer mileage rates and what a volunteer can deduct is now available at SeriousGivers.org at the “What can a charity volunteer deduct?” page. Go there for ongoing coverage (comments are closed on this page).

On December 3, the Internal Revenue Service issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Our post on the 2011 rates.

Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 50 cents per mile for business miles driven;
• 16.5 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service of charitable organizations.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. For more information, see our article on charitable deductions for volunteers and IRS Revenue Procedure 2009-54.

Find out more about your favorite charity by looking at its IRS Form 990 or 990-EZ.

Read the latest additions to this site.

Home.

Read the article.

In addition to being easy, donating to charity can be tax-smart – reducing your income, [...]]]> Here’s what you’ve been waiting for. A list of nine ways to give to your favorite charities, and they range from easiest to easy. If it’s difficult, challenging, complex or even sweat-inducing, it doesn’t make the list.

In addition to being easy, donating to charity can be tax-smart – reducing your income, capital gains, and estate and gift tax liabilities.

Download / print out the PDF.

The List:

[2] A donor-advised fund is an investment account administered by a charity or investment organization. A donor opens a donor-advised fund by making a contribution, and receives an immediate income tax deduction. The donor no longer controls the funds contributed, but can recommend grants to charities of their choice.

[3] By donating an appreciated asset, you avoid any capital gains taxes you would pay when you sell it during your lifetime – a tax-smart alternative to selling the asset and donating cash.

[4] Normally, IRA withdrawals are taxable income. Until December 31, 2009, however, you can withdraw and donate tax-free from your IRA, if you are at least age 70 ½. The check should be paid directly from the IRA account to the charity.

[5] Even though it’s called “estate giving” (because the gift happens when you die), you have to act during your lifetime to use these approaches.

[6] This approach also avoids probate. Probate does not apply to lifetime giving.