Every year during the holiday season many people donate to charities for more reasons than a tax deduction. However, remember, if you want to claim a tax deduction for donations must itemize your deductions when you file taxes for the tax year.. There are several tax rules you need to know before making a donation. Here are six tips from the IRS that should help people make best use of their contributions to charities.
Qualified organizations eligible for deductions
Qualified organizations eligible for deductions. You can only deduct donations on your tax return made to qualified charities. Use the tool IRS Select Check to see if the group you are making the donation to qualifies as a qualified charity. You may deduct donations made to churches, synagogues, temples, mosques and government agencies.
Monetary donations to charity
Monetary donations to charity. Monetary donations include those made by cash or check, electronic funds transfer, credit cards and payroll deduction that get sent to a charity. You must have a bank record or written proof of the charity to deduct any donation on your taxes. The receipt from the financial institution must show the name of the organization and the date and amount of the contribution. Bank records include canceled checks or statements of cooperative credit banks and credit cards. If you contribute through payroll deduction, taxpayers should always maintain a pay stub, W-2 forms or other documentation from the employer employer to prove their charitable deduction. This information should always show the total amount retained as a donation, along with the pledge card showing the name of charity.
Household goods donate to charity
Household goods donate to charity. Items include household furniture, household items, electronics, appliances and linens are often donated to charities. If you donate clothing and household items to charity generally must be at least used and in good condition in order to claim a tax deduction. If you claim a deduction of more than $ 500 for an item does not have to meet this requirement by including a qualified receipt with your tax return filing.
Required records. You should get a receipt from the organization for every qualifying deduction (either money or property) of $ 250 or more. Additional rules apply to the declaration for donations of that amount. This statement is in addition to the records necessary to deduct cash donations. However, a statement with all required information could meet both requirements to claim the charitable deduction.
New Year gifts.
New Year gifts. You can deduct contributions in the year makes. If you upload your donation to a credit card before the end of this year, will count for 2014. This is the case but not pay the statement until 2015. A check will also feature 2014 provided it is mailed in 2014.
Advice on Year-End Charitable Contributions to Qualified Charities
Special rules. Special rules apply if you donate a car, boat or plane to a charity.
The IRS requires that contributions of $250 or more must be substantiated in order to be deductible. The burden is placed on you, as the donor, to request written substantiation because a canceled check may not be sufficient to support a deduction. The amount of the contribution is fully deductible whether it is paid by cash, check or credit card. However, a charitable deduction cannot be based on a mere pledge to pay. The pledge must actually be paid before the end of the year in which the deduction is claimed.
Additional Resources from the IRS on Charitable Deductions:
- Publication 526 , Charitable Giving
- Publication 561 , Determining the Value of Donated Property
- Form 8283 , Charitable non-monetary
- Form 1098-C , Donations of Automobiles, Boats and Planes