‘Tis the giving season, and what better way to support your favorite charity than with a gift that saves you a little when April rolls around next year? The IRS in a recent press release revealed key tips to help you keep those tax deductions.
Donations need to be in good used condition or better to be tax deductible. For items worth $500 or more, consider getting a qualified appraisal of the item. For donations over $250 you should get in the IRS’s quant words, a “written acknowledgement” – a receipt for the rest of us.
With monetary gifts, you need a “bank record” of the donation – this can be canceled checks, and bank, credit union and credit card statements. But they must show the name of the charity as well as the date and amount of the donation.
For gifts or donations over $250 you will need a receipt from the charity.
Qualified Charities: if you are donating to an organizations that isn’t a church, synagogue, temple, mosque or government agency use Select Check, a searchable online tool to verify that the charity is eligible.
Year End Gifts: Eyeing the calendar for that last minute gift before the year runs out? Donations charged to a credit card are made when the charge is made, not when the bill is paid. Checks count if they are mailed by December 31.
Itemize Deductions: In order to claim charitable deductions on your tax return, you must itemize your deductions.
Save Your Receipt: this basic advice applies to pretty much everything having to do with the IRS, and it is the bottom line when it comes to making donations to charities as well. If you are dropping items off at an unattended drop site, keep a written record of the items donated, to whom the donations was made, the date of the contribution, the fair market value, and the method used to determine the value.