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Tip of the Day Know When to File your Taxes

Know When to File your Taxes - For those of you who have been doing taxes a long time, you know that when you are expecting a refund you should...

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Gift Tax Deduction

Gifts do not attract tax deductions in many cases, however in some cases depending on the nature of the gif and its value among other factors, gifts may attract tax deductions. In many cases the main reason behind gift tax deductions is the value of the gif. Many countries the U.S included have certain limits within which gifts do not attract tax deductions. If however, the value of the gift surpasses the minimum limit of gift tax exemption then the excess amount must be taxed at the recommended rates as may be determined by the said country's tax policy.

Moving away from the issue of gifts and tax, let us have a look at the subject matter, gift tax deductions; it is quit unlikely that any body giving out a gift may be entitled to gift tax deduction. Some people have tried to argue that gifts given to their children such as school fees and other student related monies should be deductible, the bad news is that the government does not entertain any tax deductions on gifts given be they from locals or foreigners and aliens alike. There may nonetheless be some exemplary cases such as the situations of gifts being given to specific eligible charities and other qualified humanitarian organizations.

Deductible gift tax limits

In the case of organizations to which if you donate any gift then your gift is tax deductible are numerous. To know exactly which ones are eligible and which ones are not, you would have to go through the publication 78 of the IRS list of organizations that are eligible to receive tax deductible gifts. As much as the IRS may list the companies or charitable organizations eligible for tax deductible gifts, it is important to note that the tax deductible amount is still dependent on the registration status of the charity and the status of the donor as well as his/her income.

The IRS stipulates that individuals can only give up to 50% of their gross income as tax deductible gifts to a charity while the amount is even much less if the donation is directed at a private foundation. On the other hand, corporations can only give up to 10% of their taxable income as tax deductible gifts or donations to whichever eligible charity or foundation

Reporting deductible gift tax

One of the most controversial areas in so far as taxation cases are concerned is the tax deductible gifts. Most tax audits are conducted on maters pertaining to this section. It is therefore advisable to report your donations appropriately by filling the form1040 schedule A to verify the circumstances surrounding your gift tax deduction. if on the other hand you happen to be the recipient, then you should also make a point of declaring receipt of your gift before the end of the current tax year.

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Definition of the Day Fannie Mae

Fannie Mae- Is a common and very popular name or nickname to describe the US Federal National Mortgage Association. Also know as the FNMA Fannie Mae is a publicly owned corporation that has government support. This corporation was chartered in 1938 to purchase mortgages from lenders and resell them to...

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