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Our Business Tax Tips Section provides valuable on-line information for the entrepreneur and business owner. Browse away ... we're certain you'll find information to make your business more successful. |
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| In the wake of the recent disasters
here and the holiday season approaching, you may have made a charitable contribution. Many charitable
organizations make extra efforts to collect money and goods all during the year. Be sure
to keep records of the money you contribute to the Red Cross or other similar charities
and the canned goods and other non-perishables you put in collection bins for
organizations that help the needy. Your last-minute contributions can add up to a nice
deduction if you itemize. Remember, if you contribute $250 or more at one time to a
charity, the organization receiving the donation must provide you with written
documentation of the donation. A cancelled check is not sufficient proof. Spend Wisely to Itemize If you don't have enough deductions to itemize, consider bunching -- by delaying or accelerating -- your eligible expenses so that you can itemize every other year. Some expenses for which you may be able to control the payment time include medical-related costs, real estate and personal property taxes, charitable contributions, and work-related expenses. Charitable Deductions Begin at Home Make sure your generosity during the year 2007 pays off as much as possible by rounding up all of your write-offs. The big contributions which translate to the big deductions are hard to overlook: what you give your church or synagogue or alma mater. But little expenses from your good-deed-doing can also mount up. Whether it's out-of-pocket contributions to a bell-ringer or what you pay for supplies while you're doing charitable work, if the money is going to help a qualifying charitable organization, you get a deduction. Smart Gifts Make Great Write-Offs There's a special break if you donate property such as stock or mutual fund shares to charity. If you owned the asset for more than a year, you get to write off its value on the day that you made the gift, not what you originally paid for it. You don't have to pay tax on the appreciation while you owned the stock, either. In the past, that untaxed appreciation could fall victim to the alternative minimum tax, but no more. Take advantage of this break now if you donated appreciated property last year and keep it in mind in the future. Whenever you make substantial contributions, consider using appreciated property instead of cash. What if you really want to keep the stock, for example, in your portfolio? Donate the shares you own and use the cash you would have given to buy shares on the open market. The advantage is that you'll owe tax only on profit that accrues after you repurchase the shares. If the stock or mutual fund shares you plan to donate have decreased in value, sell the shares and donate the cash. That way, you can deduct your loss and claim a charitable deduction as well.
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