Top Tips for Charitable Contributions on Tax Return

Charitable deductions can be a very useful tax saving tool for people in many different circumstances. If you are looking for a tax deduction, give to charity can be a “win and win.” It is good for them and for you. Here are eight things you need to know about deducting your charitable gifts:

 

Top Tips for Charitable Contributions on Tax Return

  1. Make a donation to a qualified charitable organization, if you want to deduct the gift. You can not deduct contributions made to either an individual, a political organization or a political candidate. No matter how charitable the purpose is, this kind of “donation” will not be viewed as charitable giving in the view of the IRS>
  2. You must file Form 1040 and itemize your deductions. Present on Schedule A , Itemized Deductions, to your federal tax return. This is a littler harder, but tax software programs can help you do it.
  3. If you receive a benefit of any kind in exchange for their contribution, the deduction is limited.You can only deduct the amount that exceeds the fair market value of the benefit received.Examples of benefits include merchandise, food, tickets to an event or other goods and services.
  4.  If you give tangible items instead of cash, the deduction is generally the fair market value of that item. The fair market value is generally the price if you sell the property on the open market.
  5. The used clothing and household items must generally be in good condition to be deductible.Special rules apply to vehicle donations.
  6. You must file Form 8283 , Noncash Charitable Contributions in English, if your deduction for all noncash gifts is more than $ 500 per year.
  7. You should keep a record of your donations made during the year how to test. The record type to keep depends on the amount and type of your donation. For example, you must have a written record of all cash donations regardless of amount in order to take the deduction. It can be a canceled check, a letter from the charity, a bank record or a record of payroll deduction. You must include the name of the charity, the date and amount of the contribution. Proof of wireless phone meets this requirement for donations through a text message if it shows the same information.
  8. To claim a charitable deduction of money or property valued at $ 250 or more, you must have a written statement from the organization. The statement must indicate the amount of cash or a description of any property donated. You should also indicate whether the organization provided goods or services in exchange for the gift.

 

Top Tips for Charitable Contributions on Tax Return

For more information, see Publication 526 Charitable Contributions and 561, Determining the Value of Donated Property (in English). Forms and publications are available at IRS.gov or by calling 800-829-3676.