Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for February 4th, 2001

Posted by taxguru on February 4, 2001

Bush Tax Cut Plan

I will be analyzing & explaining the tax cut proposals in more depth over the next few weeks. In the meantime, if you are like most people and mostly concerned about “what’s in it for you,” you can check out this calculator on the Bush website. I haven’t verified the calculations, but trust it will be close to an accurate representation.

In fact, I would trust anything from the Bush people 100% more than the lies and distortions from the members of the JackAss Party and their accomplices in the mainstream media who never tire of falsely portraying any tax reduction as “fiscally irresponsible ” & a “windfall for the evil rich.”

KMK

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Posted by taxguru on February 4, 2001

Donating Items To Charity

You are allowed to claim a deduction on Sch. A of your 1040 for the fair market value of assets that you contribute, unless they are depreciated business assets (used computers, etc.). If the total value claimed for a year is less than $500, you don’t have to give any details. If the total is over $500, you need to include some general details on Form 8283.

It never ceases to amaze me how many people claim zero for this deduction because they forgot to keep receipts. IRS auditors are taught to allow $500 with no questions asked; so when you skip this deduction, you are giving a gift of $200 to the IRS.

Also, many people don’t claim perfectly legitimate deductions because they want to avoid IRS scrutiny. Unfortunately, this stratgy often backfires. Anyone in law enforcement knows that a tell-tale sign of a drunk driver is someone who goes overboard trying to look inconspicuous; driving slowly, full long stops at intersections. Rather than decrease one’s profile, this has the opposite effect. Not claiming legitimate deductions has the same effect with IRS. It increases their suspicion as to what you are trying to hide and can trigger an audit.

For clothes & personal furniture, there are some guides you can use, such as this one from the Chicago Salvation Army. There are also software programs that prepare the 8283 for you, such as this one.

For larger things, you can use an official price guide, such as the Kelly Blue Book.

If there is no such guide for the item you donated, you can come up with valuations by contacting dealers or by checking classified ads.

KMK

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