March 19, 2012 10:43 am

Checking Tax-Exempt Status of Charities

Before you make any donations to a charity, it’s helpful to check on its tax-exempt status. Unless the organization is IRS approved, you cannot claim any tax deduction for contribution to it. The IRS has made it easier to do this by creating an online tool (www.irs.gov/charities/article/0,,id=249767,00.html) that you can use to search an organization’s exempt status. If the organization is listed as exempt at the time you make your contribution, it will be deductible (assuming you itemize and have the right substantiation) even if the organization later loses its exemption.

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Tax Glossary

Keogh plan

Retirement plan set up by a self-employed person, providing tax-deductible contributions, tax-free income accumulations until withdrawal, and favorable averaging for qualifying lump-sum distributions.

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