Deducting Charitable Contributions

Eight Essentials

Donations made to qualified organizations may help red

uce the amount of tax you pay. The IRS has eight essential tips to help ensure your contributions pay off on your tax return.

1. If your goal is a legitimate tax deduction, then you must be giving to a qualified organization. Also, you

cannot deduct contributions made to specific individuals, politi

cal organizations or candidates. See IRS

Publication 526, Charitable Contributions, for rules on what constitutes a qualified organization.

2. To deduct a charitable contribution, you must file Form 1040 and itemize deductions on Schedule A. If your total deduction for all noncash contributions for the year is more than $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.

3. If you receive a benefit because of your contribution such as merchandise, tickets to a

ball game or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received.

4. Donations of stock or other non-cash property are usually valued at the fair market value of the property.

Clothing and household items must generally be in good used condition or better to be deductible. Special

rules apply to vehicle donations.

5. Fair market value is generally the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.

6. Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must

maintain a bank record, payroll deduction records or a written communication from the organization

containing the name of the organization and the date and amount of the contribution. For text message

donations, a telephone bill meets the record-keeping requirement if it shows the name of the receiving

organization, the date of the contribution and the amount given.

7. To claim a deduction for contributions of cash or property equaling $250 or more, you must have a bank

record, payroll deduction records or a written acknowledgment from the qualified organization

showing the amount of the cash, a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift. One document may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirement for all contributions of $250 or more.

8. Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete

Section B of Form 8283, which generally requires an appraisal by a qualified appraiser.

Provided by Internal Revenue Service (IR-2012-57)

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