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Year-end giving
The end of the year is approaching rapidly. Any donating you want to do should be done by December 31st in order to optimize the deductions you can claim on your tax return. Here are IRS guidelines for different types of giving.
Cash donations
In order to deduct a charitable donation of money, the taxpayer must have a written record of the donation. Acceptable records include written notes from the charity and bank records such as canceled checks, bank statements, and credit card statements. Written records from any source must include the name of the charity, amount of contribution, and date.
Non-Cash (Clothing and household item) donations
Items people might donate include clothing, furniture, electronics, appliances, bedding, and more. Donated items must be in good condition to be deductible. Items worth over $500 do not have to be in good condition if the taxpayer includes a qualified appraisal of the item with the return.
Additional Reminders:
• Only donations to qualified organizations are tax-deductible. Click here to search for qualified charities at IRS.gov.
• Only taxpayers who itemize their deductions may claim deductions to charitable contributions. This means the deduction is not available to those who file short forms 1040A or 1040EZ.
• Contributions are only deductible in the year they were made. Donations charged to a credit card in 2011 are deductible in 2011, even if the card isn’t paid until 2012.
• If the amount of deduction for non-cash contributions is over $500, Form 8283 must be submitted with the tax return.
• Try to obtain a receipt of donation from the charity for all non-cash donations.
Follow these tips to help your year-end giving and tax processes run smoothly. As always, maintain good records for everything. For more help, contacts TaxCutters, your favorite accountants in Chicago.
