(If you have a part-time side business and work for that exclusively from a home office, that could qualify.) If you’re a salaried employee and you spend only a handful of hours per week working from home, that’s not good enough. The space must also be your principal place of business, or where you meet regularly with customers. If it’s in a room that you also use as a home gym, or where you hang out and watch TV in the evenings, it doesn’t qualify. For example, the office in your home must be exclusively used for business. To be able to take home-office deductions, you’ll need to follow the rules. There are several kinds that commonly appear on tax returns, such as home office deductions and deductions for business miles driven. To get an idea of what might be considered “normal,” check out the table below:Īnother kind of deduction that can boost your odds of being audited is the business-expense deduction. Significant noncash donations can draw attention, too, since taxpayers with bad intentions can inflate their value. A common way to stand out is if your total contributions exceed the norm for someone with your income profile. The IRS will take note of your return and perhaps audit you if your charitable deductions seem unusual in any way. (These days, many charities will send out an end-of-the-year summary of your giving, to assist with your taxes.)ĭeductions for your donations to charitable organizations can’t exceed 50 percent of a certain calculation of your adjusted gross income (AGI), and the limit is 30 percent for donations to certain private foundations, veterans organizations, fraternal societies, and cemetery organizations. Donations of $250 or more will require a written record of the donation from the organization. With cash donations, you’ll need either a receipt or a canceled check with the date and amount - if the donation is for less than $250. When you’re donating items, they should be in good condition and you can generally deduct their fair market value. For example, donations must be made to qualifying organizations, which include many churches and religious organizations and many non-profit organizations, among others.ĭonations can be made by cash - this term includes checks and credit card payments - or items such as household goods, and even cars. As with just about all tax-related matters, there are rules and guidelines to follow. One of the benefits of making charitable contributions is not only the satisfaction we get knowing that we’re supporting a cause we care about, but also possible tax deductions. Still, you could be audited, especially if you have one or more of these deductions: He added: “We are the only agency if you give us more people and money, we give you more money back.” As IRS Commissioner John Koskinen has noted, Congress’s budget cuts at the IRS are not saving money, but are costing the government between $4 billion and $8 billion, as money due isn’t collected. In fact, it’s getting even unlikelier, largely due to budget cuts reducing staffing at the IRS.
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