Maybe. Deductions are more valuable when tax rates are higher, and higher-income taxpayers face higher rates in 2013. But the return of the itemized deduction reduction could make your donation deduction less valuable. Also keep in mind that the amount of your deduction depends on various factors, including what you give. For example:
Long-term capital gains property. This might be stocks or bonds held more than one year. You may deduct the current fair market value. You also avoid any tax you’d pay on the gain if you sold the property. So such property can make one of the best donations.
Tangible personal property. Your deduction depends on the situation:
• If the property isn’t related to the charity’s tax-exempt function (such as an antique donated for a charity auction), your deduction is limited to your basis.
• If the property is related to the charity’s tax-exempt function (such as an antique donated to a museum for its collection), you can deduct the fair market value.
Services. You may deduct only your out-of-pocket expenses, not the fair market value of your services. You can deduct 14 cents per charitable mile driven.
It’s important to pay attention to the many additional rules and limits that apply. If you don’t, your benefit could be smaller than expected. So before making a significant donation, please contact us to find out the tax benefit you’ll receive.