Just one day left until the 2013 tax year ends! Where can an enterprising taxpayer turn for a very LAST-CHANCE deduction? How about CHARITY – and, come to think of it, and that’s not a bad way to wrap things up for the year!
Donations made through December 31 will apply to the 2013 tax return, whether they involve cash or goods. You’ll have to itemize on your federal tax return to take advantage of the deduction. However, Minnesota also offers some relief from state taxes for many taxpayers, even if they do not itemize.
For starters, look under the Christmas tree. Do some gifts replace clothes or toys that children have outgrown? You might also check your closets for obsolete stuff that someone else might use. You can contribute those secondhand items (in good condition, of course) to Goodwill Industries, the Salvation Army or another charity and reap a deduction.
One caution: Be sure to ask for a receipt showing the Dec. 31 date, as well as the initials of the employee or volunteer who receives the items. (You’ll probably have to set your own value for the items.) It also wouldn’t hurt to back up your deduction further, by taking a cell phone picture of the articles you contributed.
Generous taxpayers also can give dollars instead of goods and receive a deduction. We’d suggest dating a check and placing it in the mail in time to be postmarked on Dec. 31. Electronic donations also may qualify. For example, a charge made to a credit card is considered to be delivered in the year when you actually make the charge, the IRS says. For more details, check IRS Publications 526 or 17 (shorter explanation).
Meanwhile, Minnesota Department of Revenue allows taxpayers to subtract a portion of their charitable donations, if the giving is larger than $500 and they did NOT itemize on a federal return. That’s covered in the instructions for Schedule M1M.
The options for last-day tax deductions are limited, but helping others with a contribution will work, if done correctly!
Happy New Year from EricJohnLtd!!.