Tax year 2014 is almost over and the tax filing season is just around the corner. Atlanta’s IRS Spokesman Mark S. Green offers free helpful year-end tax tips for you to consider:
“Taxpayers should review and gather documents now as part of their year-end tax planning. The important deadline of Dec. 31 is fast approaching and a little advance planning could save taxpayers time, stress and perhaps even money,” said Green.
Gifts to Charities – Many people give to charity each year during the holiday season. “Remember, if you want to claim a tax deduction for your gifts, you must itemize your deductions,” said Green. There are several tax rules that you should know about before you give.
Qualified charities. You can only deduct gifts you give to qualified charities. Use the IRS Select Check tool to see if the group you give to is qualified. Remember that you can deduct donations you give to churches, synagogues, temples, mosques and government agencies. This is true even if Select Check does not list them in its database.
Monetary donations. Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return. This is true regardless of the amount of the gift.
Year-end gifts. You can deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2014. This is true even if you don’t pay the credit card bill until 2015. Also, a check will count for 2014 as long as you mail it in 2014.
Records required. You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements. Special rules apply to several types of donated items, including clothing or household items, cars and boats.
Annual Gift Tax Exclusion You can give as much as you can afford to anyone even if they are not related to you. In 2014, you generally could give up to $14,000 to anyone and the gift will not be taxable. If you are married, both you and your spouse could have separately given gifts valued up to $14,000 to the same person without making a taxable gift.
In addition, generally Tuition or medical expenses paid directly to an educational or medical institution for someone else are not considered taxable gifts. The Lifetime Gift Exclusion is $5.34 million.
For more information, visit IRS.gov.