Question from a reader:
“I live with my baby and my baby’s mom. Can I claim them at tax time?”
My answer: It depends. Take a look at my previous two articles on qualifying children and qualifying relatives. There isn’t a straight answer I can give because you have to work through who is providing support. Is there a claim from Mom’s parents that might supercede your claim? Is there any other support coming in from outside services?
How about Mom? Is she planning on claiming your child herself? A super tenative answer again would be, possibly you can claim them both but you need to work through the questions or sit down with a tax professional (there are some of us who take questions off season) and plan profitable, money saving tax decisions accordingly.
Question from a reader: “I donated bags of clothing to Goodwill. The clothes were worth thousands of dollars. Do I write that in the receipt since there is no amount there?”
My answer: No, I would suggest you figure the thrift or salvage value of the clothing. You otherwise should have gotten an appraisal prior to making the donation. The IRS requires that you have an appraisal for big ticket items or for large volume donations. Remember the thrift store would have to actually sell the goods for thousands of dollars and provide you with some sort of letter saying that was the case in order for you to support your claim with the IRS.
Readers, bags of old clothes should be treated as that, no matter how much you originally paid for the clothing. The IRS and state agencies know that you are cleaning out your closet. You should be donating to help people who don’t have clothes. The tax break is just a side benefit.
Keep the questions coming readers. You know I love you all!
Kim Isaac Greenblatt
You are reading Kim Greenblatt’s blog, profitable, as he answers questions about your baby’s mom and contributions to charity.