As the 31st of December looms near every year, many Americans get involved in tax preparation Kissimmee. Some make contributions to their retirement accounts and others utilize donations to help them bring down their taxes. Come tax time, and this will really help you out, as long as you follow IRS rules about deductions on charitable expenses. The most important points are given below. Make sure you follow them, otherwise you will not be able to claim your charitable expense as a deduction.
Kissimmee Tax Preparation Tip: Itemization is a must
Even if you donate significant amounts worth thousands of dollars, they are not going to help you in reducing your taxes if you claim the standard deduction. Before you can claim charitable expenses as a deduction, you must itemize them on Schedule A. Once you do this, mention the same in a relevant section of your 1040 form.
Kissimmee Tax Preparation Tip: There are no maximum limits
When you contribute to a retirement account, you cannot do so more than the maximum limit. With donations, there is no cap, and you can contribute as much as you like. The more generous you are, the more it helps you with your taxes.
Kissimmee Tax Preparation Tip: Timing is very important
When it comes to taxes, the right timing is everything. You must have made all your donations before the year ends, and only then you can claim them as a deduction. As long as the date on your check is 31st December, it is fine, your deduction will be used for decreasing your taxes for that year. If it is later than this, it will be considered for taxes in the next year. The same applies to your credit card donations.
Kissimmee Tax Preparation Tip: Make sure you are contributing to an IRS qualified charity
While charitable expenses are deductible, it is only so when you contribute amounts to a charity which enjoys the IRS qualified status. In other words, the charitable organization must meet IRS requirements, and only then taxes will be exempted. In formal terms, this is referred to as the 501 (c) (3) status.
So before you make any contributions, find out from the organization if it has this status. Only when they show you proof should you donate an amount, otherwise it will not serve your tax purpose. You can even search the IRS website to find out if an organization is classified as tax-exempted.
Kissimmee Tax Preparation Tip: Cash is not the only thing you can donate
The IRS lets you claim deductions even when you donate household gifts. The amount you will be able to deduct will be the market value of the item. Just take note that whatever you are deducting is under acceptable conditions, otherwise you cannot claim any deductions on it.
The above points are important considerations when you get involved with tax preparation Kissimmee. You should abide by them so that you pay the lowest amount in taxes. And make sure you take a receipt which the IRS will demand if the amount is greater than $250.
If you need more information about our Kissimmee accounting and tax services, please contact us at 407-502-2400. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, and Hunters Creek, FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt status applications.