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| Is there a quick way to computer the following?
For someone in, say, a 25 percent tax bracket, how much would you have to give an eligible charity in donations (items, not cash) to reduce your federal income tax by $300? I understand that the items are not worth their full value when donated, and I know how to go about determining their value. |
Follow-Up Postings:
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| Find your taxable income without the deduction in the table in the 1040 booklet. Then find the tax amount in the chart that's $300.00 less and the income amount will be next to that. For example, say your taxable income (before the deduction) is $45,200.00. The tax on that amount (for a single person) is $7,730.00. Your want to reduce your tax by $300.00 to $7,430.00. You'd have to reduce your taxable income by at least $1,150.00, to $44,050.00. |
Here is a link that might be useful: 2007 Tax Table
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| I need to correct the last sentence to read: You'd have to reduce your taxable income by at least $1,151.00, to $44,049.00. |
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| So that means that charitable deductions are fully deducted from income: if my taxable income is $50,000 and I donate items worth $1,000, then my taxable income is now $49,000? I thought only a percentage of charitable giving was tax deductable. |
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- Posted by western_pa_luann (My Page) on Mon, May 26, 08 at 19:37
| I think mona was referring to MONEY donated... not things. |
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| I was referring to money or things. Yes, the deductions reduce your income dollar for dollar. There are limits explained in the link below. |
Here is a link that might be useful: Charitable contributions - limits on deductions
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| In Canada, if I donate a stock certificate to a charity, I get a charitable receipt for the full amount of the value of the stock. Plus ... I pay no tax on the capital gain that had been developed! I like them apples! ole joyful |
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| Unless Congress changes tax law, you must itemize to be able to claim any charitable contributions. |
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- Posted by housenewbie (My Page) on Wed, May 28, 08 at 11:36
| Aye, that's the rub. Unless your other deductions exceed $10,000 (10,500?) for a couple, then the charitable contributions have no impact on your taxes. I'm ineligible for the mortgage interest deduction because it's not enough. All my deducitons together only add up to ~$8,000. So, standard deduction it is. Medical costs are only deductible once they exceed 7.5% of your income. IIRC everything else is dollar-for-dollar. |
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