Some people are taking America's federal debt personally. They've contributed money to help reduce it.
There's a problem, though. The money that taxpayers give directly to help chip away at the federal debt doesn't specifically go to pay off what Uncle Sam owes.
Instead, the contributions are deposited in the Treasury Department's general fund. That's basically the government's main checking account.
Hmmm. It looks like the federal government needs to rewrite its public announcement about the debt donation program:
I don't know about you, but that section from page 15 of IRS Publication 17 sure makes it seem like any individual gifts made payable to and sent specifically to the Bureau of the Public Debt will go to pay off the debt.
A bit of bait and switch?
Not really, swears Uncle Sam.
"The gifts go toward funding the federal government, not to pay off the debt," acknowledges Bureau spokeswoman Mckayla Braden.
But despite the account diversion, the feds point out that individual contributions do help reduce the amount of money the government would otherwise have to borrow to pay bills.
So technically, the contributions do help reduce the federal debt.
OK. If you say so.
Uncle Sam's representatives, however, should make that money trail more clear.
Deducting your debt donation: At least the closing paragraph is straightforward. If you give Uncle Sam a few bucks via a check to the Bureau of the Federal Debt, you can deduct the debt donation amount from your taxes.
Remember, though, that all the regular charitable contribution rules still apply.
The donation must be made in the tax year for which you are filing.
And you have to itemize to claim the deduction.
Still, if you're so inclined to spare the country a few more dollars, this method at least gives you a possible tax break for your generosity and patriotism.
- Voluntary payments to the ease the public debt are deductible
- Just in case debt ceiling deal fails,
U.S. Rep. suggests spending priorities
- Deductions demand documentation
Want to tell your friends about this blog post? Check out the buttons -- Tweet, Reblog, Like, Digg This and more -- at the bottom of this post. Or you can use the Share This icon to spread the word via email and other popular online avenues. Thanks!