Clock ticking for 2008 contributions
Published 11:59 pm Monday, December 29, 2008
As 2008 winds down, taxpayers still have a couple of days left to make contributions and payments that could affect their April tax returns.
Gail Hayes of Rabren Odom Pierce and Hayes PC said contributions to charitable organizations can be made right up until the end of the year.
“If the contribution is less than $250, a cancelled check or a bank record will suffice,” Hayes said. “If it’s more than $250, you’ll need a written document from the organization. “
Hayes said that’s a relatively new tax law, and many times, contributors need to ask for the documentation.
Hayes also recommends making an extra mortgage payment.
“If you have a mortgage payment due on Jan. 15, you can pay it early (before the end of the year) and get credit for that payment on your 1098 form,” she said.
There also is still time to make contributions to a traditional IRA, for which taxpayers can take a deduction.
“You have until April 15, 2009, to do that,” Hayes said. “We recommend that, especially if you have a tax liability. Most people would rather make the IRA contribution than pay the income tax.”
Getting tax records together now puts taxpayers in better position to complete their returns in time to make IRA contributions, she said.
To help taxpayers plan their holiday-season and year-end giving, the IRS offers theses reminders:
Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of the year count for 2008. This is true even if the credit card bill isn’t paid until next year. Also, checks count for 2008 as long as they are mailed this year.
Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations.