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Thread: Charitable Donations

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    Featured Member tRoUbLeMaKeR's Avatar
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    Default Charitable Donations

    Alright.... so I'm alittle slow on this whole thing. Are donations to organizations like unicef and doctors without borders 100% tax deductable?

    See I was thinking that I was going to end up claiming some of my dancing money this tax year. So there's a sure bet that I'll end up paying a decent chunck for taxes. But I was think that if I'm going to end up paying the government an ass load in taxes then I'd rather go ahead and take most of that money now and donate it. I think it would go to a good cause.

    Does this make sense? Any help would be greatly appreciated!
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    God/dess Lena's Avatar
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    Default Re: Charitable Donations

    Tax deductible in that you can subract it from the total amount of income you are being taxed on, up to a certain amount, not from the amount you pay in taxes. So if you made twenty thousand and donated five hundred to a 501(c) charity, you would pay taxes on $19,500, but there is a limit on how much you can deduct.



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    Featured Member tRoUbLeMaKeR's Avatar
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    Default Re: Charitable Donations

    alright....well I'm planning on paying taxes for 2004 for the money I've made dancing. I'm just now looking at my deposits and what not - because I wasn't very smart about keeping good records. How do I know how much they'll want to take out of my reported income?
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    Veteran Member DJ_Duane's Avatar
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    Default Re: Charitable Donations

    Donations to charities are usually tax-deductible, but you'd need to ask the charity how much of your donation would be deductible under the laws of the Federal and State governments.

    All the charities I've helped have 501(c) status and donations are tax-deductible, but I'm unclear on the specifics.

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    God/dess Lena's Avatar
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    Default Re: Charitable Donations

    If it's your first time, it's probably worth it to go to a professional tax accountant. It might cost you $100, but it could easily save you $1000 if you go to someone who knows what they're doing.



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    Featured Member tRoUbLeMaKeR's Avatar
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    Default Re: Charitable Donations

    Like someone at H&R Block or someone more specialized?

    Well I just donated to Doctors Without Borders. They seem pretty good. And my b/f just donated to the Red Cross.
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    Member Jon_CPA's Avatar
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    Default Re: Charitable Donations

    Doctors Without Borders is listed as a 501c on their website. Contributions to the orginizations are limited to 50% of your Adjusted Gross Income ("AGI") for cash contibutions and 30% for noncash property contributions.

    Contributions of less then $250 need only be substantiated by proof of payment (receipt, or cancled check). Cash contributions in excess of $250 must also be substantisted by written acknoledgemnet of the donee. Property contributions in excess of $500 but less than $5,000 require yo to complete and file form 8283 with your return. Property contributions in excess $5,000 require that attach a "qualified appriasal" of the property with your tax return.

    The contribution is take as an itimezed deduction on schedule A. The deduction reduces your taxable income on a dollar for dollar basis, except for high income earners subject to a pahse out, up to the AGI limitations. Contributions in excess of the AGI limitations maybe carried forward up to five years.

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    Banned Melonie's Avatar
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    Default Re: Charitable Donations

    On the subject of charitable contributions, I would also add that the true dollar amount of reduction in taxes you owe versus the dollar amount of the contribution you made is a function of your total income and total tax rate percentage. Thus while the dollar amount of charitable contributions offsets dollar for dollar against taxable income, in reality the dollar amount of tax savings may only be 25% or 30% or 35% of the amount you donated, depending on your individual tax bracket.

    There is also the issue that deducting charitable contributions also requires you to itemize deductions versus taking the standard deduction. Itemizing deductions is a no-brainer if you report a 'high' income, if you live in a high tax rate state, if you own your home and have tax deductible property taxes and mortgage interest etc. However in many cases of a 'single' person who rents, i.e. most younger dancers, the standard deduction will result in a lower tax bill versus itemizing deductions since 'single' persons who rent do not have a large amount of qualified deductions. Note that 'business expense' deductions from dancing can be taken in either case as they are reported on Schedule C, but that charitable contributions are considered to be personal not business thus only deductible if the person itemizes their deductions using Schedule A. (Also an exception to this rule exists for dancers who are incorporated, LLC etc who make contributions in the name of the corporation).

    Thus it pays to do the math to discover whether or not claiming charitable contribution deductions but being forced to itemize deductions to do so actually saves you any money in taxes versus taking the standard deduction but not being able to claim your charitable contributions as tax deductions.

    There is lots more info to be found at
    Last edited by Melonie; 01-05-2005 at 09:18 AM.

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