View Our Blog!

Jennifer Juhl, CPA, P.C. Blog

It will be updated with information we think you'll find helpful to add to what is on the web site.

News

New Rules May Impact Your Charitable Contributions

Did you make a cash contribution to your favorite charity? Have you recently spent a weekend cleaning stuff out of your garage or closet and then donated the items to a local charity?

Charitable contributions can be tax deductible, but you must have the proper records to support your deduction.  Due to the Pension Protection Act of 2006 the rules on recordkeeping for charitable contributions became a little more strict beginning in January 2007

To deduct a charitable cash donation, regardless of the amount, you must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Acceptable bank records would include canceled checks or bank or credit union statements containing the name of the charity, the date and the amount of the contribution.

Under the previous rules, records such as personal bank registers, diaries or notes made around the time of the donation could often be used as evidence of cash donations. Personal records like this are no longer sufficient.

Here are some additional tips to help you deduct your charitable contributions on your 2008 federal tax return.

• Charitable contributions are deductible only if you itemize deductions using Form 1040
• Contributions must be made to a qualified organization
• Used clothing and household items such as furniture, linens and appliances must be in good condition
• Vehicle donatinos are subject to special rules
• To deduct charitable contributions of items valued at $250 or more you must have a written acknowledgement from the qualified organization
• To deduct charitable contributions of items valued at $500 or more you must complete a  Form 8283, Noncash Charitable Contributions, and attach the form to your return

More information is available on the IRS Web site at IRS.gov. A good resource is IRS Publication 526, Charitable Contributions, found on the IRS.gov web site or contact Jennifer Juhl, CPA P.C.

Mileage Rates

The standard mileage rate for business use of a personal vehicle is:
January 1 - June 30, 2011: 51 cents per mile
July 1 - December 31, 2011: 55.5 cents per mile

Contribution Limits to 401(k)s, Qualified Employer Plans & IRAs

401(k)s and other qualified employer plans:

Year           Contribution*                      50 or older catch-up

2010          $16,500                              $5,500

2011          $16,500                              $5,500

2012          $17,000                              $5,500

Traditional IRAs and Roth IRAs:

Year           Contribution**                     50 or older catch-up

2010          $5,000                                $1,000

2011          $5,000                                $1,000

*some restrictions may apply; be sure to check with your plan administrator

**be sure to consider your adjusted-gross income limitations to determine if you are eligible to make a contribution or if your contribution is tax deductible

Links