Does support count as a charitable contribution?
So...you ask...what CAN you do with the money you are paying these people? First, you should donate through a recognized church, mosque, or synagogue. These are almost always acceptable for tax deduction purposes. Let the religious institution then pay-out to the needy.
If you are supporting family and (in certain circumstances) friends directly, as you suggest, then you need to determine if you provide more the 51% of the income for these folks, and whether they could be qualified as dependents. Now, it should be noted that merely providing 51% is not enough to provide dependent status. However, it's a start! Especially if any of these folks are children or relatives. If you can claim them as dependents, you can get a tax advantage by increasing the number of deductions you may claim. This can be tricky! Consult with a tax attorney or CPA -- you could easily make a mistake here and quickly end in the "unhappy" place. The IRS code section dealing with deduction and dependents can be found at 26 U.S. Code §152. This section is less dense that the governing charitable contributions, but still painful for the lay person.
Do you need help determining the status of your relatives in terms of deductions? Do you need help finding a tax shelter, or explanation, for your income? Give us a ring! We have many years of helping others through tax issues and would be glad to provide our expertise to help. 1-800-579-9864.
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