Items you donate may not qualify for a deduction

It used to be that you could take all your unused clothing and household items to the local Goodwill, Salvation Army, or thrift store and reap a nice charitable contribution deduction.

All you needed was a receipt stating the fair market value and the deduction was allowed. The rules have changed for any donation of noncash items to charitable organizations after August 17, 2006.

A charitable contribution deduction of clothing or household items will only be allowed if the item is in good used condition, or better, and you have a receipt. The IRS can deny a deduction for any item that has little monetary value. There is an exception for single items that have a value of more than $5000 and for which you have a qualified appraisal.

Tax Tips Small Business

  • Turning Interest Payments Into Tax Deductions

    Make interest payments work for you, not against you

    You can deduct business-related interest on your business return if you used the borrowed funds to purchase business supplies, equipment, services, etc. Co-mingling business and personal expenses makes it difficult to determine what amount of the interest is business versus personal. If this happens, the IRS may consider the entire amount as nondeductible personal interest and disallow the deduction. Therefore, keep all business purchases made with loans and credit cards clearly separate from your personal expenses. Use a separate credit card for your business to make it easier.

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Small Business Quick Tip

  • Business Mileage Rate 2

    The optional standard mileage rate for the business use of an automobile is 54 cents per mile in 2016.
Wednesday, 17th July 2019
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Tax Tips Personal

  • Money for College

    Are scholarships taxable?

    Many college students receive scholarships or fellowships to help pay for their education. If you are in college and received a scholarship or fellowship grant, there are a few key points to keep in mind. Qualified scholarships and fellowships are treated as tax-free and not included in taxable income if all of the following conditions are met:

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Personal Quick Tip

  • Roth IRA Contribution

    You can actively participate in your employer's qualified plan and may still be able to contribute to a Roth IRA. A deduction for contributions to a traditional IRA may be limited or nondeductible if you are a participant in a qualified retirement plan.