With my girlfriend wanting to donate a car, my roommate donating old furniture, and minor cash donations, I thought that I’d do a little research into the rules and procedures governing the deduction of donations from your taxes. It’s a little early, considering 2005 tax returns aren’t due for another ten months (tick tock!), but it’s better to know the procedure before crunch time than scrambling last minute.

Eligibility:
In order to deduct charitable donations from your taxes, you basically need to satisfy two conditions:

1. Itemize Your Deductions – Folks taking the standard deduction won’t get a tax benefit for charitable donations.
2. Donate to a Qualified Organization – Normally you can just ask and they’ll tell you, but IRS Publication 78 (it’s been upgraded to a search and is not a PDF) has a list of the common ones.

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Ha, I saw this on the front page of CNN Money today. In a “highly unscientific and self-promotional survey,” it looks like Barclay took sixty thousand of their higher earners (greater than about $182,000 a year) and just tallied up their first names. Top name for the guys was David and tops for the girls was Susan. For the top twenty, check out CNN Money. James was ranked twelfth in yet another meaningless list that has no bearing on life.

Every quarter, the FDIC analyzes each state and produces a state profile that summarizes the state of banking and the economy in the state. This is important in these times because a housing boom supported by an increase in income and jobs is one that can be sustained. A housing boom supported by speculators and investors stands a higher likelihood of crashing. Be sure to read your own state along with California, where the housing market is ridiculous, and Texas, which hasn’t been a part of the housing boom, for a comparison.

Much thanks to Calculated Risk for blogging about the FDIC’s reports.

This is brilliant! Days after the Supreme Court’s ruling allowing governments to exercise the power of eminent domain to seize property for economic benefit for the state, it was reported in a press release that Logan Darrow Clements, a businessman in New Hampshire, will attempt to turn Supreme Court Justice David Souter’s, home into a hotel, museum, and restaurant! Justice Souter was one of the five who voted in favor of the City of New London.

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One of the reasons I joined Costco was because the price of gasoline at a Costco was about a ten cents (or greater) cheaper than the surrounding gas stations when I lived in College Park (the neighboring gas stations were two Exxon’s, a BP/Mobile, and a Gulf). At the time, even with a 5% rebate on gasoline credit card (AT&T Universal Cash Rewards, though here’s the latest list of the best gas credit cards), the difference in price was greater than 5% plus I had the benefit of buying in bulk at Costco for things like 7 lb. tub of nacho cheese. The downside of using Costco was that they only accepted American Express (1% cash back) or debit cards (0% cash back), so I couldn’t double dip and use a higher cash-back card with the cheaper gas, until I ran into a concrete and useful real life example of price competition.

When I moved up to Howard County, the Costco Warehouse still had gas but it also had two Exxon’s right next to it (you can debate the usefulness of two Exxon’s within a mile of each other, but whatever). Due to the proximity, the Exxon’s gas prices were depressed compared to gas stations not in the region. If you strayed more than a mile, you could see “regular” gas prices not affected by the lower Costco price.

Here is where the price competition comes into play: The Exxon gas prices are essentially pegged to be three or four cents higher than Costco’s gas price (based on my experience only, no actual concrete evidence). So I can get Exxon gasoline at a price cheaper than Costco after you factor in the 5% cash-back and current gasoline prices (at $2.00, if you can find it that cheap, you get 10 cents back).

Price competition in a capitalist society in action! I better find a pretty good reason to keep Costco around now… I mean, other than the 7 lb. tubs of nacho cheese.

Welcome to Blueprint for Financial Prosperity and the second Carnival of Personal Finance! Started last week by the esteemed Flexo at Consumerism Commentary, this Carnival is designed to highlight the cream of the crop of articles published by your favorite personal finance bloggers this past week. To hear Flexo’s words and his introduction, read this entry. For a future schedule of the Carnivals and their hosts, read this entry. While this article has been published, we are still taking submissions until midnight tonight (Monday) and add them as they come in, so if you were on vacation this weekend and want to put in your post, let me know. Thanks!

Flexo from Consumerism Commentary, site of the first Carnival of Personal Finance, crosses the wire first with his article on Eminent Domain Rules Officially Changed. It’s been big news these days with the recent 5-4 ruling by the Supreme Court effectively expanding the rules under which eminent domain can be exercised. It’s scary and you should read this article.

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There’s an incredibly insightful article on the NY Times website (login required, us BugMeNot) about the black market of stolen identities and credit card information. The article talks about two prominent black market forums, both accessible online to anyone who is willing to register for the forums, called Carders Portal (http://carderportal.org/) and the International Association for the Advancement of Criminal Activity (http://iaaca.com/). On these boards you can buy “cobs,” changes of billings, where they change the address to one of your choosing. For $50 you can score a Discover card, for $85 you can get an AMEX…

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While doing research for my last FSA article, I came upon an article written by Jeff Schnepper (article was taken down from MSN) that was listing ideas for cutting your 2004 taxes. I skimmed the article, most of which is common knowledge, until I hit upon something called the Schnepper-Malagoli Charitable Tax Grab. You can read the excerpt in full below but essentially you can rent out part of your home tax free (up to 15 days) to a charity (or anyone really), then donate to the charity, and walk away with extra money (and a warm fuzzy feeling) in your pocket as long as there was no pre-arrangement.

Here’s one you don’t have. It’s called the Schnepper-Malagoli Charitable Tax Grab. You can rent your home to anyone during the year — up to 14 days total — and pay zero tax. (Internal Revenue Code Section 280A (g), for those of you who feel compelled to look it up.)

So your church, synagogue or any recognized charity rents your home for a board meeting. They pay you $500. That money is completely tax-free.

Without any compulsion or prearrangement, you also contribute $600 to the charity. If you’re only in the 25% bracket, you save $150 in tax. You also got $500 tax-free from the rental. That’s a total of $650 more in your pocket, less the $600 contribution. You’re up $50 and the charity is up $100. One meeting per month (12 is less than 15) and you’ve “made” $600 and the charity is up $1,200!

Was it intended when Congress drafted the tax code? Clearly, no. Is it completely within the clear wording of the code? Absolutely, yes! Just because it’s a loophole doesn’t mean you can’t legally do it. And, there’s nothing wrong with doing well as you do good.

It’s brilliant, anyone ever heard of it (it has a doozy of a name)?

Flexible Spending Accounts, or FSAs, are “use it or lose it” and, come June 30th, I’m going to lose what remains on my balance since my benefits plan refreshes every July 1st. I wrote something on FSA’s a little while back, called How Does a Flexible Spending Account Work, and now the time has come for me to apply it. We all have a set of expenses we believe are health related, well, the government has added a bunch of expenses you probably didn’t think you can use with an FSA. Additionally, reading this list is probably easier than reading this IRS document
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Actually, according to CNNMoney,Columbia, Maryland is the 25th best place to live in the East with a population of under 100,000 (barely) for 2005. I’m not entirely sure when this was released and I, by nature, am always skeptical of these “Best Of” lists only because the whole “your school is ranked whatever in US News and World Reports” soured me to the idea that any sort of subjective ranking system has any merit whatsoever. But these lists are always fun because the will show you some interesting statistical facts you probably would spend hours trying to find otherwise.

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