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Understanding Charitable Contributions

Charitable contributions can have a big impact on both personal income tax as well as the income taxes related to business owners.

In fact, unless a business is a C-corporation, charitable contributions will in most cases flow through the business and can then be claimed as deductions on an individual's tax return.

This is indeed the case whether an individual is running a sole proprietorship, partnership, S-corporation or limited liability corporation.

IRS Publication

Those interested in maximizing the tax benefits with regard to charitable contributions should consider several key rules with regard to IRS tax code and tax law. For example, only contributions to charities that have been listed as qualified organizations by the Internal Revenue Service are indeed deductible.

Taxpayers should refer to the IRS publication made available by the IRS related to charitable contributions for a list of qualified organizations. Conversely, it is easy to simply search online for a list of qualified organizations that are eligible for this type of tax deduction.

Fair Market Value

Equally important is to know that contributions that are greater than $250 will in most cases require a letter of receipt from the organization receiving the contribution. Your Atlanta tax attorney can assist you with this.

Conversely, in most instances contributions that are less than $250 may be confirmed via a canceled check. In addition, donations of property are deductible based upon their fair market value at the time of the actual charitable contribution.

As a note, it is not possible to deduct a contribution with regard to an asset that has already been written off as a depreciating asset.

Your IRS Tax Attorney In Atlanta

Further, it is not acceptable to deduct the value of time or services that are simply volunteered by the taxpayer. Working with your IRS tax attorney in Atlanta is one of the best ways to know for sure what is deductible and what is not deductible in this regard.

For example, a taxpayer cannot deduct the part of a contribution that directly benefits the taxpayer. If the taxpayer receives a gift in exchange for a charitable donation then it is not deductible. In other words, a taxpayer can deduct only the amount of the contribution in excess of the value of the gift.

Atlanta IRS Tax Help

Finally, it is generally accepted that contributions to charitable organizations can only be deducted in the year that they are made.

For example, contributions that are pledged at a later time cannot be deducted until they have actually been paid to the organization in question. Take the time to consider these simple yet important aspects of charitable contributions in order to lower your tax bill while also helping others.

Seeking Atlanta IRS tax help from an expert in the field is one of the best ways to keep your taxes in order while maximizing deductions and tax credits. Contact The Gartzman Law Firm, P.C. an Atlanta, Georgia tax lawyer for detailed information when it comes to these and other important tax issues.

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