Sorry, my husband handles any questions. I just know we've never given her (our CPA friend) any documents about charitable donations. |
I'm OP. I've heard of charitable deductions but I don't know how it works. I guess I just assumed it's for super wealthy people or business owners or unique tax filers, while we're really normal middle class people with normal careers. I asked nicely if this could benefit us in any way. Just trying to learn. Thanks. |
People who give more overall to charity. We'll give about $40-50k this year in cash/equivalent donations, then maybe $1k in "stuff" to various places. FYI: the new tax bill imposes a floor for deductions in 2026, so if you can accelerate 2026 donations into 2025, it's worth doing so tax-wise. One charity we give to every year at a certain level, and they're happily accepting our 2026 donation now and applying it (for donor-level purposes) to 2026. For that charity, giving at a certain level gets you some additional "benefits" that's why we give at least that much each year. |
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OP, two questions:
1. How much per year do you think you pay in mortgage interest? Just the interest -- not the principal 2. How much do you pay in state income tax and property taxes combined? If the answer to all of the above is more than 30k a year, then it makes sense to itemize and include your donations. If the answer is less, it doesn't |
Oh bugger off. Itemizing vs standard deductions aren’t some big mystery that someone has to explain to OP. This info is literally everywhere. |
Alrighty, Karen. (I'm a CPA but I understand why people find it confusing in the beginning.) |
| We keep a list of everything we donate and use It's Deductible to assign value. |
| Give the receipt to your accountant along with your mortgage info and other tax documents so they have what they need to figure out if you should itemize. |
This is tough but true. You should be checking your accountants work. Not understanding what the accountant is doing is exactly how rich people have the house of cards fall. Now you're more likely to end up owing than going to jail. But also maybe watch the first episode of Schitts Creek again. |
| Usually we are given a blank receipt and have to assign our own value to it. I sometimes try to take pictures of the bags/items. Typically you should use thrift shop value, which is a fraction of whatever you paid for it. |
Oh FFS. That isn't accurate. Schitts Creek? Why would you even use an accountant if you are going to check their work? People go to accountants because they can't do it themselves. You are NOT going to jail if you provided your accountant with accurate information. You only go to jail if there was willful intent and those people knew exactly what they were doing versus "accountant error". |