If you itemize your deductions, making a contribution to your favorite charity can help reduce your income taxes. Tax-deductible donations include cash, property, and your unreimbursed expenses as a volunteer. The records you need to support your deduction vary depending on the type and value of your donation. Before you make your next donation, check out the current tax rules.
Contributions of cash under $250 must be documented by a bank record (such as a cancelled check) or a detailed written receipt from the charity. Previously, such gifts could be documented by a simple record maintained by the taxpayer. This means that cash placed in an offering plate will no longer be deduct-ible unless the charity provides you a receipt.
Although the rules for cash gifts of $250 or more have not changed, remember that to be deductible such gifts require a written acknowledgment from the charity stating whether goods or services were provided in exchange for your gift. What’s more, this receipt must be in hand before filing your tax return.
CLOTHING and household items
Gifts of used clothing and household items face additional scrutiny. Such items must be in “good used condition or better.” Although the IRS has not defined the term “good used,” you should try to docu-ment the condition of your gift. All non-monetary contributions require a detailed receipt from the charity. If the property is valued under $250 and a receipt is not available, such as at unattended drop-off locations, reliable written records are still required.
OTHER GIFTS of property
Used clothing and household items
Vehicles (cars, boats, airplanes)
Other noncash donations
*Receipt from charity must include name of organization, plus date and amount of donation.
This brochure gives a quick recordkeeping review for some common donations. The rules governing the tax deductibility of charitable contributions are filled with limitations and exceptions that cannot be easily or quickly summarized. For details that apply to your charitable giving, give us a call.
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