Tax Law Blog | IRS Tax Attorneys

Make sure to get your maximum refund. Why should the IRS get to keep a penny of your money?

For 2007, you got to take off as much as $3,400 from your income for each qualified exemption you have, up from $3,300 in 2006. (The level rises to $3,500 in 2008.) Despite myths to the contrary, these include children who are full-time students under age 24, regardless of how much income they may have. As your income increases, your exemption deduction may decrease. For 2007, on a joint return, your exemption deduction were phased out between adjusted gross income of $234,600 and $357,100.

For singles, the numbers are between $156,400 and $278,900. With the exemption rising in 2008, the phaseouts increase as well.

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Steve Bennett, president and CEO of Intuit, the maker of the TurboTax software program, reports this one:

A client gave away his house to a local fire department to burn up in a training exercise. So far, so good. It appears to be a legitimate, allowable charitable contribution that was made to an appropriate organization.

But here’s the kicker: The value of the property actually went up once the house was removed.

Because the value increased, sorry, there could be no deduction.

More on this story.

What a bummer, huh? Find a Tax Lawyer at the tax law directory.

Charity, as I hope everyone remembers, begins with a tax deduction. If you didn’t have the cash to contribute in 2007, I hope you charged it. And, likewise, if you don’t have the cash when it comes time to contribute in 2008, go ahead and charge it. The deduction is allowed in the year of the charge, not when you actually pay the bill.

Get a receipt from the charity to which you made a donation, and, if you’re still worried about documentation, get the credit card company to send you their record of the transaction.
Source

Bank basis point donations will be made as a fixed, relatively small percentage of each credit card transaction.2 Cardholders will have the ability to designate a charity or charities to receive these donations, and will be notified of the amounts of these donations in an annual or semi- annual statement (Statement).

Unlike rebates these amounts will not be available to cardholders and will not be deductible by cardholders as charitable contributions for tax purposes. Explanations of the basis point component of the Program, and any Statement furnished to cardholders showing the amount of their basis point donations, will state that they are not deductible.