Are Verizon MyRewards+ CharityChoice Gift Cards tax-deductible? Donation question

But what if the reward points were earned as part of a business phone contract? Would that change things because technically the points were "paid for" as part of a business expense?

That's an excellent question! If the points were genuinely earned as part of a legitimate business expense that you already deducted, it becomes more complicated. In that scenario, you could potentially argue that you did have a "basis" in the points since they were effectively part of what you paid for through your business contract. For the personal scenario described though, where rewards points are just a perk of being a regular customer, the general rule applies - no basis means no deduction.

How does taxr.ai work with more complex situations? Like if I have a mix of cash donations, reward card donations, and donated items from around the house?

I'm skeptical of these tax tools. How accurate is it really for edge cases like this? Does it actually cite IRS publications or tax code when giving these answers?

It handles mixed donation types really well - you can upload receipts, statements, or even photos of donation acknowledgments, and it categorizes everything automatically. It caught that I had both deductible cash donations and non-deductible rewards card donations mixed together and separated them correctly. For edge cases, it's surprisingly accurate. Every conclusion comes with citations to the relevant IRS publications, tax code sections, and even links to court cases that established the precedents. You can click through to read the full sources if you want to understand the reasoning. That's actually how I learned that certain kinds of points programs do sometimes create basis while others don't.

Does this Claimyr service actually work? The IRS phone lines are notoriously impossible to get through on.

This sounds like a paid service just to talk to a government agency we already pay taxes to access? That's ridiculous! How much does it cost to use this service? And are these IRS agents even giving consistent answers? I've heard different agents give different answers to the same question.

It absolutely works! I was shocked too. I had tried calling for 3 days straight and never got through. With Claimyr, I had an IRS agent on the line the next morning. They handle the waiting for you so you don't have to stay on hold. Regarding consistency of answers, you're right that different agents sometimes give different guidance. That's why I asked for the specific publication number that covered my question. The agent directed me to Publication 526 which clearly states that donations where you had no basis generally don't qualify for deductions. Having the official publication number was much more reliable than just verbal advice.

That sounds like a lot of extra steps... is it really worth the hassle just to get a tax deduction? Wouldn't you lose money on the resale compared to just donating the rewards directly?

You're absolutely right that it involves extra steps and might not be worth it for smaller amounts. You'd definitely lose some value in the resale process - typically 10-30% depending on what you're selling and where. I only recommend this approach if you're someone who itemizes deductions and is close to the standard deduction threshold. In that specific case, pushing yourself over the threshold with legitimate deductions might save you more in taxes than the value lost in the conversion process. For most people though, direct donation of the rewards cards is simpler and still does good, even without the tax benefit.

Thanks for pointing that out! I was about to use my Verizon points for exactly this purpose. Do you know if there's a way to donate the rewards directly to a charity instead of going through CharityChoice to avoid the admin fee?

I don't believe Verizon offers a direct donation option unfortunately. However, if you have a charity you specifically want to support, you might consider redeeming for regular gift cards that the charity needs (like office supply store cards, etc.) and donating those directly. That way 100% goes to the charity. Just call the charity first to check if they accept gift cards as donations. Many do for operational expenses, but policies vary. And remember, you'd still face the same tax deduction limitations we've been discussing.