taxes

8 tax breaks that cost Uncle Sam big money

Taxes » Tax Deductions 8 tax breaks that cost Uncle Sam big money

Charitable donations
Charitable donations © iStock

Charitable donations

Americans are by and large a giving bunch. IRS preliminary data from the 2012 tax year show that more than 33 million taxpayers claimed charitable deductions when they itemized on Schedule A. Donations can be cash, which in the IRS' eyes means money, checks or charges to credit cards. Or the gifts can be household goods, vehicles, appreciated assets or even the calculation of miles driven in doing charitable work.

These various gifts to qualified organizations -- for which the donor should have receipts in case the IRS has questions about the gift -- help reduce taxpayers' taxable income, which means lower tax bills.

The donations also mean less money for Uncle Sam. Between 2014 and 2018, this deduction for gifts to qualifying nonprofits will mean the U.S. Treasury will be out an estimated $192 billion. Uncle Sam's losses increase when you add in another nearly $34 billion for donations to educational institutions and almost $26 billion given to health-focused organizations.

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