1. Get in the giving mood A gift to your favorite charity in December
can produce happy tax returns, too. As long as you itemize, you can
deduct your donations; this will reduce your taxable income and lower
your tax bill. You have until Dec. 31 to get the check in the mail.
You also can put your pledge on your credit card by year's end. Using
plastic also could help out holiday money management. Your charged donation
will count for 2007 tax purposes, but you won't have to pay the bill
until next year. A few other points to remember in this end-of-year
giving rush:
* Make sure the nonprofit has IRS approval. The agency keeps track
in Publication 78, which you can search online. * Get substantiation
for your gift. It the IRS ever questions your claim, you must be able
to produce a receipt or record (canceled check or charge card statement)
verifying your donation of any amount, not just those of $250 or more.
* If you donate household goods, they must be in good or better condition
or the IRS could later disallow the claim. * Auto donations have special
deduction rules, depending upon how the charity uses the vehicle. You
should get a statement from the nonprofit detailing its plans for the
vehicle and how much you can deduct.
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