Cash Flow Planning for Life - Helping you reach your personal & professional financial goals.

Cash Flow Planning for Life

Helping you reach your personal & professional financial goals.

Do you like to give back to your community or help those in need? Although you can’t deduct the value of your time or the effort you spend on behalf of any charity, you can deduct donations and actual out-of-pocket expenses you incur. Tracking these expenses, like transportation, can generate a nice tax deduction.

Charitable Deductions

This is the first installment of 16 Year-End Tax Tips for 2013
which can also be downloaded from our eBook library.

You do not need to be a board member to qualify for charitable deductions. Here are some deductions affiliated with charitable work that you may not be aware of:

Tip #1: Transportation

  • If you use your car for charitable activities you can deduct the cost of transportation to and from any charitable event, or the location where you are performing charitable services. The new mileage rates for 2013 have been released by the IRS. The standard mileage rate for use of your vehicle driven in service of charitable organizations is 14 cents per mile plus related parking fees and tolls. Similarly, you can deduct airfare, train, or bus costs for traveling to charitable events.

Tip #2: Telephone Charges

  • Have you made calls to solicit donors or volunteers for a charity? Or, maybe you’ve served on a volunteer committee for a charitable event. You can deduct the full cost of charges for long distant phone calls, faxes, and cell phone calls made on behalf of a charity.

Tip #3: Uniforms

  • A deduction is allowed for the cost of uniforms you purchase on behalf of a charity. However, the clothing can not be suitable for everyday wear. So, something like Boy Scout or Girl Scout uniforms would qualify for the deduction. But, matching plain t-shirts purchased for event committee volunteers would not qualify because these could be considered everyday, casual clothing.

Tip #4: Foreign Exchange Students

  • If you have hosted a foreign exchange student in your home during the past year, you qualify for a tax deduction. You are able to deduct $50 per month that the student attends high school. The criteria is as follows. The student must:
  • Live in your home
  • Be under a written agreement
  • Not be a relative

Tip#5: Fundraising Dinners

  • Many non-profit organizations host an annual dinner & gala event. If you have attended one of these events this year, you can actually deduct a portion of the cost. A deduction is allowed for the difference between the cost of the ticket and the fair market value of the meal. If you and your spouse attend a $100 per plate dinner with a value of the meal at $35, you can deduct $130 ($200 – $70). Note if the amount exceeds $75, you will need to obtain written documentation from the charity.

Tip#6: Save Your Receipts

  • These deductions may seem small on the surface but depending on the amount of charitable activity you or your spouse do in a given year, they can add up! Be sure to keep all receipts and records, so you can reference them when you go to prepare your tax return. You may be more of a philanthropist than you were aware of!

16 Year End Tax Tips for 2013

Interested in learning the other ten tax tips? Download our FREE eBook: 16 Year-End Tax Tips for 2013.

Need help with itemizing your charitable deductions or other tax accounting services? Contact us online or call (239) 384-9688 in Naples or (239) 768-5008 in Fort Myers.

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– Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.
LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements.

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