Charitable Giving Question

[reallyprettyhappy]

I have a quick question about chariable giving and I thought I might be able to find the answer faster here than I could sifting through the IRS pubs on it. My question is about giving to my daughter's school. She goes to a private Montessori school and earlier this month the director/owner of the school sent all of the parents a letter asking for cash donations. Evidently the downturn in the economy has had some negative impact on the school's finances and they find themselves in need. Now, we generally give about $100 per week to our church, but we recently moved here and have not yet found a parish to join, which means that I had some charitable giving money saved up anyway that I needed to find something to do with. So, what I'm wondering is if I give the money to the school and she in turn provides me with an itemized receipt, will I still be able to claim the donation(s) on my taxes as charitable giving? To my knowledge, the school is not a tax exempt institution. An alternative might also be to donate needed supplies. Would that change anything, tax wise?

Thanks for your thoughts.

[cschin4]

Now, we generally give about $100 per week to our church, but we recently moved here and have not yet found a parish to join,

That is great that you are a giver. You may not be able to deduct the gift to the school. Probably would have to check with your accountant. Anyway, hope you find a Parish.

[reallyprettyhappy]

That is great that you are a giver. You may not be able to deduct the gift to the school. Probably would have to check with your accountant. Anyway, hope you find a Parish.

Thanks, I hope we find one soon too. We're starting to feel really lost. We've been to a different one every week for the past 5 weeks and have not yet found the one that feels like 'home'. If anyone has any suggestions for a Catholic Church in Spokane WA, send them my way please!

Also in the market for a new accountant, hence the question. Moving across the country is so disruptive.

[disneysteve]

Unfortunately, you can't deduct money given to a non-charitable organization. I think the same thing every time my daughter's school hits us up for one fund raiser or another. I wish they would change those rules. It would make people more willing to support these places.

[SnoopyCool]

I'm not sure but I don't think so, unless the school is a non-profit school.



http://www.irs.gov/pub/irs-pdf/p526.pdf

HTH.

[reallyprettyhappy]

Based on that document, I believe you are right, we probably can't deduct it. I guess this one will just be out of the goodness of our hearts then. I think with buying the house this year, it may turn out that we don't actually owe for once, so the 'charitable giving' portion of our taxes is not as essential this year.

[reallyprettyhappy]

On a much smaller scale, the special olympics organization called me earlier this week and said that this year they are signing people up for magazine subscriptions at a discount in order to raise money for this year's games. I signed up for a subscription for 29.99...do you think I can deduct this one? LOL, drop in the bucket.

[disneysteve]

Originally Posted by reallyprettyhappy

On a much smaller scale, the special olympics organization called me earlier this week and said that this year they are signing people up for magazine subscriptions at a discount in order to raise money for this year's games. I signed up for a subscription for 29.99...do you think I can deduct this one? LOL, drop in the bucket.

Nope. Even though the organization will get a cut, you probably can't deduct this either since you are getting goods or services in exchange for your money. The exception is if the organization gives a statement documenting what portion of the money is tax deductible.

For example, I've attended charitable events where the ticket price was $100 and you got dinner but the rest went to charity. There was a statement that $50 was deductible because the other $50 paid for dinner.

[boosami]

Originally Posted by reallyprettyhappy

On a much smaller scale, the special olympics organization called me earlier this week and said that this year they are signing people up for magazine subscriptions at a discount in order to raise money for this year's games. I signed up for a subscription for 29.99...do you think I can deduct this one? LOL, drop in the bucket.

Yes, SO is a 503(c)(3) organization and in general contributions are tax deductable. I donate to them every year. If you get something for your donation, though, it may only be deductible minus the value of the goods/sevices received. Call them and ask for the goods/services value of the magazine subscription.

[wnlbutterfly]

That is right on target, if the organization is non-profit, you can claim the donation AFTER you deduct the value of what you received. Good example is Girl Scout cookies, they cost an arm and a leg, but you should deduct what a regular box of cookies would cost since you are receiving the goods.

I agree with you DisneySteve, if IRS would allow more deductions on that, more people would give. I personally think it should be on the front of the tax form, not an itemized deduction.

[disneysteve]

Originally Posted by wnlbutterfly

Good example is Girl Scout cookies, they cost an arm and a leg, but you should deduct what a regular box of cookies would cost since you are receiving the goods.

I'd be careful with stuff like this. You're only talking about a few cents per box. I'm not sure it is worth trying to take a deduction that might raise a red flag at the IRS. A box of cookies is $3.50 ($4.00 in some places). There are plenty of brand name cookies that are the same price or more at the supermarket. You can't rightfully compare them to the no name cookies at the dollar store and try and deduct $2.50/box. Around here, the troop only keeps 50 cents/box. The rest goes to pay for the product.

[SnoopyCool]

I asked my tax instructor about this situation tonight and she said she didn't see why you couldn't deduct your contributions to the school, since you aren't receiving anything for that contribution and it is an educational institution.

I'd ask your tax professional to be sure, but maybe that avenue is worth pursuing.

[disneysteve]

Originally Posted by SnoopyCool

I asked my tax instructor about this situation tonight and she said she didn't see why you couldn't deduct your contributions to the school, since you aren't receiving anything for that contribution and it is an educational institution.

I am not a tax professional but I don't believe this is true. The school is a private business. Essentially, giving money to them is no different than me giving money to the corner deli to help support them. It isn't a charitable organization so the money wouldn't be deductible. Just my non-professional opinion.

[boosami]

Originally Posted by SnoopyCool

I asked my tax instructor about this situation tonight and she said she didn't see why you couldn't deduct your contributions to the school, since you aren't receiving anything for that contribution and it is an educational institution.

Uh, you're receiving an education from the school in return for the money?

[PetMom]

These are some very good questions about what is deductible.

I have always gone straight to the IRS via a phone call and asked a detailed quiestion such as this. And ask them to refer you to the code/law/rule they have if applicable.

Also get their agent id number if they still do not give out their name.

That way you know exactly what to do.

[Joan.of.the.Arch]

Just to emphasize, I know someone who made a donation to the school her kids went to. It was not deemed tax deductible, even though she could say that other money, the tuition, she paid was what paid for the services her children got at the school. There was no way to say her children were not benefiting from the donation to their general fund. Therefore, she could not could not deduct it.

When I was in college I worked for a tax exempt community organization that had recreational facilities. Some people would pay for their day's recreation and concessions by check and would want to make out the check in a way that hid that they were actually buying something for their family with the check. Some even would pay for birthday parties like this. The accountant who I worked with pointed out that most likely these people wanted to collect up their cancelled checks at the end of the year as evidence of "donations."

[SnoopyCool]

Originally Posted by boosami

Uh, you're receiving an education from the school in return for the money?

Probably, since it isn't a public school

As I understand the OP, the donation goes above and beyond tuition, cost of equipment, books, etc. Is this Montessori school a non-profit school? Because an educational organization *can* be an IRS qualified charity, OP might be able to deduct the donation. If the school gives some sort of written communication to the OP for tax purposes (receipt), maybe he could deduct it?

[disneysteve]

Originally Posted by SnoopyCool

an educational organization *can* be an IRS qualified charity, OP might be able to deduct the donation.

That is certainly true. I donate to my undergrad college every year and that is deductible even though it is a private college. I guess OP needs to call the school and find out if donations are tax deductible. We can debate it all day and it won't answer the question.