The SGO report spells out important questions you should consider before donating a car. It also examines the overall benefits — and shares conclusions on whether a donation will be a win, loss or draw.

Among other things, the SGO [...]]]> SeriousGivers.Org (SGO) has just issued an eye-opening report on donation of cars to charity.

The SGO report spells out important questions you should consider before donating a car. It also examines the overall benefits — and shares conclusions on whether a donation will be a win, loss or draw.

Among other things, the SGO report concludes that

• Donating a car to a charity that will sell the car never produces a win.
• For a car with a $1,000 private sale value, donating the car or selling it and donating proceeds produce almost identical overall results (at best, a draw).
• For a car with a private sale value of $2,000 or more:
  • The best choice is donating the car to a charity that will use the car in its programs.
  • The second best choice is to sell the car and donate proceeds.

Read the SGO Report.

Why not print it out and keep it with your charitable contributions “stuff” — and take a look at it before you make a donation?

IRS Tip #1 — make sure you are giving to a charity. You can use [...]]]> The IRS just published a handy list of eight tips for deducting charitable contributions.

Why not print it out and keep it with your charitable contributions “stuff” — and take a look at it before you make a donation?

IRS Tip #1 — make sure you are giving to a charity. You can use the www.seriousgivers.org/find-a-charity/ page to check — every organization included in the www.seriousgivers.org database is a public charity to which donations are deductible.

Here’s the IRS tips.

If you are [...]]]> The compromise tax package just passed by Congress brings back for 2010 and 2011 the ability to donate tax-free from an individual retirement account. And, reflecting the end-of-year nature of the Congressional action, the 2010 donation can be made as late as January 31, 2011. (See section 725 of H.R. 4853).

If you are 70½ or older you can donate from your IRA directly to the qualified organization of your choice – tax-free! The tax package rule applies to the 2010 and 2011 tax years, and allows you to give up to $100,000 each year. You could call this rule the “Grin and Give Rule.”

Normally, when you take money out of your IRA, that money is taxable income to you. That’s fine, you say, you’ll just turn around and spend the money on your mortgage or give it to a charity — and get an offsetting deduction. But you might not get all or part of that deduction if, for example, you use the standard deduction or you itemize and your deductions get caught up in the phase-out rules.

Under the Grin and Give Rule, the money taken from the IRA is not taxable income to you. And you don’t have to worry about whether you use the standard deduction, itemize or face other deduction limits. Actually, if you were going to make a charitable deduction anyway, using the Grin and Give Rule could help you protect your other itemized deductions, and even save taxes on your social security. And, of course, the charity doesn’t have to pay any tax either.

Cautions: Don’t give away money you may need. The gift must be made directly from your IRA trustee to the charity. Be sure to obtain a written receipt from the charity to substantiate your donation. The Rule applies to many charities, but not all. At this moment, this is a Federal income tax law; check whether the your state’s income tax laws have been conformed to include the extension. Consult your tax advisor.

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.

The IRS has gone out of its way to help smaller nonprofits maintain their tax-exempt status. The latest warning offers a last chance, until October 15, 2010.

Read [...]]]> Thousands of nonprofits that have been failing to file their annual IRS information returns are about to lose their tax-exemption. They can’t say “nobody told me!”

The IRS has gone out of its way to help smaller nonprofits maintain their tax-exempt status. The latest warning offers a last chance, until October 15, 2010.

Read the warning.

According to the IRS, donors who contribute to these at-risk organizations are protected until the final revocation list is published by the IRS.

Elaborating on charity abuse, the IRS reported

The IRS continues to observe the misuse of tax-exempt organizations. This includes arrangements [...]]]> The IRS has released a summertime warning on top tax-related scams. Abuse of charitable organizations and deductions grabbed 4th place, in the company of phishing, return preparer fraud, hiding income offshore and frivolous arguments.

Elaborating on charity abuse, the IRS reported

The IRS continues to observe the misuse of tax-exempt organizations. This includes arrangements to improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets. The IRS also continues to investigate various schemes where donations are highly overvalued or the organization receiving the donation promises that the donor can purchase the items back at a later date at a price the donor sets.

Read the IRS release.

You can do it in three steps:

Read our description of [...]]]> The U.S. House of Representatives has moved forward H.R. 4123 – now know as the “American Jobs and Closing Tax Loopholes Act of 2010″ – which includes an extension to the end of 2010 of the Internal Revenue Code rule permitting IRA owners to make tax-free donations directly to charities.

Read our description of the rule that was in effect through December 31, 2009.

Read the current legislation (through May 28, 2010).