To save the most on your taxes when April rolls around, the best advice is to have a system in place to reduce your taxes all year round. One area where you can significantly reduce your taxes is by understanding what you legally deduct as charitable contributions.
If you file a Schedule A (Itemized Deductions) when doing your tax return, you can claim hundreds of dollars in charitable contributions with just a small effort. In fact, in all likelihood you have been short changing yourself on legal tax deductions in the past simply because you didn't know what your charitable contributions were worth or what exactly you were allowed to deduct.
The simplest way to maximize your charitable deductions with little effort on your next tax return is to purchase
Its Deductible Workbook or
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"...if you do not save at least $300 on your taxes using Its Deductible, you can return your product for a full refund of your purchase price". With that free $300+ or your money back guarantee in place, there is little reason not to try it (be sure to keep your receipt in a safe place). This resource is especially helpful in maximizing deductions for those who do volunteer work for charitable organizations.
Once you become familiar with what you can legally deduct from your taxes, you can magnify your tax savings with this new knowledge. When someone offers you a box of items that you don't really need, you'll no longer politely decline because you'll know that that box of goods is worth $50 in savings on your taxes if you take it down to your local Salvation Army store. You'll put yourself in a position to actively reduce your taxes.
If you are looking for basic information on what everyday items are worth as deductions on your taxes, you can also see general price lists at the
Salvation Army's Charity Donation Values Page and
Small Business Valuation Guide for Charitable Contributions.
In addition to actual physical items you donate to charities, you can also deduct certain expenses associated with doing volunteer work for charitable organizations. Unfortunately, the cost of your time is not deductible even if you would normally be paid for that type of work. However, the cost of incidentals in doing the charitable work such as phone calls, postage stamps, stationery, and other out-of-pocket expenses you incur in your volunteer work can be deducted.
If your volunteer work requires you wear a specific uniform, the cost of the uniform its cleaning is deductible. In this instance, a Red Cross nurse's uniform would qualify, but if you are asked to wear black pants and a white shirt for a charitable event, this would not qualify.
You can also deduct a standard $0.14 a mile when using your car in connection with volunteer charitable work as well as any related parking fees and road toll expenses. Overnight travel-related expenses include round-trip travel costs, transportation at your destination and lodging can also be deducted when traveling specifically for a charitable organization.
Special Internal Revenue Service rules apply if you incur more than $250 in deductible expenses on behalf of a single charity. If this occurs, you'll need to get a written receipt from the charity. For additional information on charitable contributions, see
IRS Publication 526: Charitable Contributions and
IRS Publication 561: Determining the Value of Donated Property
Saving $100s On Taxes Through Charitable Contribution Deductions
