Special IRS Tax Tips
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Taxable or Not Ė What You Need to Know about IncomeIssue Number: IRS Tax Tip 2015-24
All income is taxable unless the law excludes it. Here are some basic rules you should know to help you file an accurate tax return:
Taxable income includes money you earn, like wages and tips. It also includes bartering, an exchange of property or services. The fair market value of property or services received is taxable.
Some types of income are not taxable except under certain conditions, including:
Proceeds paid to you because of the death of the insured person are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that you get that is more than the cost of the policy is taxable.
In most cases, income from this type of scholarship is not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable. On the other hand, amounts you use for room and board are taxable.
State income tax refund.
If you got a state or local income tax refund, the amount may be taxable. You should have received a 2014 Form 1099-G from the agency that made the payment to you. If you didnít get it by mail, the agency may have provided the form electronically. Contact them to find out how to get the form. Report any taxable refund you got even if you did not receive Form 1099-G.
Here are some types of income that are usually not taxable:
- Gifts and inheritances
- Child support payments
- Welfare benefits
- Damage awards for physical injury or sickness
- Cash rebates from a dealer or manufacturer for an item you buy
- Reimbursements for qualified adoption expenses
For more on this topic see Publication 525, Taxable and Nontaxable Income. You can get it on IRS.gov/forms anytime.
Top Eight Tax Tips about Deducting Charitable ContributionsIssue Number: IRS Tax Tip 2015-47
When you give a gift to charity that helps the lives of others in need. It may also help you at tax time. You may be able to claim the gift as a deduction that may lower your tax. Here are eight tax tips you should know about deducting your gifts to charity:
1. Qualified Charities.
You must donate to a qualified charity if you want to deduct the gift. You canít deduct gifts to individuals, political organizations or candidates. To check the status of a charity, use the IRS Select Check
2. Itemized Deduction.
To deduct your contributions, you must file Form 1040 and itemize deductions. File Schedule A
, Itemized Deductions, with your federal tax return.
3. Benefit in Return.
If you get something in return for your donation, your deduction is limited. You can only deduct the amount of your gift that is more than the value of what you got in return. Examples of benefits include merchandise, meals, tickets to an event or other goods and services.
4. Donated Property.
If you gave property instead of cash, the deduction is usually that itemís fair market value. Fair market value is generally the price you would get if you sold the property on the open market.
5. Clothing and Household Items.
Used clothing and household items must be in at least good condition to be deductible in most cases. Special rules apply to cars, boats and other types of property donations. See Publication 526
, Charitable Contributions, for more on these rules.
6. Form 8283.
You must file Form 8283
, Noncash Charitable Contributions, if your deduction for all noncash gifts is more than $500 for the year.
7. Records to Keep.
You must keep records to prove the amount of the contributions you made during the year. The kind of records you must keep depends on the amount and type of your donation. For example, you must have a written record of any cash you donate, regardless of the amount, in order to claim a deduction. For more about what records to keep refer to Publication 526
8. Donations of $250 or More.
To claim a deduction for donated cash or goods of $250 or more, you must have a written statement from the charity. It must show the amount of the donation and a description of any property given. It must also say whether the organization provided any goods or services in exchange for the gift.
Also refer to Publication 561
, Determining the Value of Donated Property. You can get IRS tax forms and publications on IRS.gov/forms anytime.
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