taxes

Tax planning 2011: Smart moves to make now

Give to charity
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Give to charity

You must itemize to deduct charitable donations, but for most taxpayers, there's no limit to worry about. You must, however, donate by the tax year's end.

You can donate cash, write a check or charge the gift on a credit card. As long as you do so by Dec. 31, they're deductible on that year's tax return.

The same time frame applies to gifts of clothing, household goods or other less-common donations, such as appreciated assets.

And older donors have a special option. If you're 70½ or older, you can roll a required minimum distribution from a traditional IRA or other tax-deferred retirement plan directly to a qualified charity. This allows you to satisfy the distribution rules, but since you don't take the money, you won't owe taxes on it.

This tax break is especially advantageous to seniors who don't itemize, says Mark Luscombe, a tax attorney, CPA and principal federal tax analyst with CCH tax publishing and software company in Riverwoods, Ill.

If you're old enough, consider taking advantage of the rollover option this year. It's set to expire at the end of 2011.


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