tax reduction organizations??

amother

Tue, Feb 25 2014, 9:16 am

My in laws want to support us in learning. Is there any way for them to receive a tax reduction for helping us, for example, to go through a tzedaka organization?

BabsB

Tue, Feb 25 2014, 7:13 pm

If you are in the US...

For donations to a charitable organization to be tax deductible, they cannot be earmarked for a particular individual.
They can give to the charity and the organization help you, they just can't direct the money to do so.

Here's a summary of the topic
http://www.irs.gov/taxtopics/tc506.html

Here is more specific information from Publication 526
Contributions to Individuals

You cannot deduct contributions to specific individuals, including the following.

Contributions to fraternal societies made for the purpose of paying medical or burial expenses of members.

Contributions to individuals who are needy or worthy. You cannot deduct these contributions even if you make them to a qualified organization for the benefit of a specific person. But you can deduct a contribution to a qualified organization that helps needy or worthy individuals if you do not indicate that your contribution is for a specific person.

Example. You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. However, you cannot deduct contributions earmarked for relief of a particular individual or family.

Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses.

Expenses you paid for another person who provided services to a qualified organization.

Example. Your son does missionary work. You pay his expenses. You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services.

Payments to a hospital that are for a specific patient's care or for services for a specific patient. You cannot deduct these payments even if the hospital is operated by a city, state, or other qualified organization.

Sorry that's probably not the news you wanted.

amother

Tue, Feb 25 2014, 7:21 pm

Can they give a tax deductible donation to the kollel and the kollel can you you a bigger paycheck?

STovah

Tue, Feb 25 2014, 7:23 pm

amother wrote:

Can they give a tax deductible donation to the kollel and the kollel can you you a bigger paycheck?

That's not legal, see the guidelines posted above.

Tova

Tue, Feb 25 2014, 7:52 pm

No, absolutely not.

Tova

Tue, Feb 25 2014, 7:55 pm

I always have to close my mouth/stop my hand from typing when I see people say to donate to a tax exempt organization and write in the memo that it's for such and such family. It would be nice if that could be done but it cannot due to abuses of it, one such scenario is what the OP is suggesting. (as a way to transfer wealth, get out of gift tax and potential estate tax everyone could just funnel money through tax exempt org's...not)

33055

Tue, Feb 25 2014, 8:10 pm

I would love to know how Bonei Olam allows contributors to make directed donations for the expenses of specific couples. The tax benefits of funneling the money through their organization towards individual couples is touted in their literature.

BabsB

Tue, Feb 25 2014, 8:16 pm

Squishy wrote:

I would be interested to know how they get away with it as well.