Charitable Contributions
Required Documentation
If you contributed to a church or qualified
non-profit organization, these contributions can be deducted
as an itemized deduction on Schedule A. The IRS requires you
to keep a written acknowledgement from the church or organization
for any contribution. Contributions must be substantiated
either with a bank record or a written communication from
the donee organization.
Disasters
As you consider making charitable contributions to assist
natural disaster victims, keep in mind that you can deduct
your contributions only if you make them to a qualified organization.
You can ask any organization whether it is a qualified organization,
or you can investigate by calling the IRS (toll-free) at 1-877-829-5500
or by checking the online version of Publication 78, Cumulative
List of Organizations described in Section 170(c) of the Internal
Revenue Code of 1986 on the IRS Web site at http://apps.irs.gov/app/pub78.
Churches and governments are usually qualified organizations
even though they are not included in Publication
78.
Vehicles
If you donate a vehicle that has a fair market value over
$500, your deduction depends on what the charity does with
the vehicle. For example, if the charity immediately sells
the vehicle, your deduction may be limited to the gross proceeds
from the sale. Also, substantiation requirements are stricter
than with other charitable contributions. Charitable contributions
are deducted on Schedule A.
Fair Market Value
Extra tax deductions may be as close as your closet. If you
donated clothing, toys, furniture, or other household items
to charity, you are allowed to deduct the fair market value
of your donated items. All goods donated must be in good condition
to be eligible for a tax deduction. Read, IRS
Pub 561, Determining the Value of Donated Property, for
more information. You can also use the Salvation
Army value guide as a source.
Charity Benefit or Event
Have you attended a charity benefit or event lately?
You may be able to deduct the dollar amount that is more than
the fair market value of the event. For example, you attend
a dinner fundraiser for a qualified non-profit organization
and your ticket price is $65. If the regular price of the
meal would have been $10, your contribution amount would be
$55.
Exchange Students
If you have an American or foreign exchange student living
in your home, you may be able to deduct up to $50 per month
as a charitable deduction on Schedule A. You must have a written
agreement from a qualified organization that provides the
student program. The student must not be a relative and must
be a full-time student at the high school level or below.
Non-Qualified Organizations
Not every donation you make to a worthy cause is deductible
as a charitable contribution. If you gave money to an individual
in need, or to an organization and specified that the contribution
was for an individual, you are not allowed to deduct the amount
given. When you donate to non-qualified organizations such
as civic leagues or social clubs, you cannot take a tax deduction.
Date of Contribution
You may usually deduct charitable contributions only in the
year that you actually make them. A check that you mail is
considered delivered on the date you mail it. A contribution
charged on a credit card is deductible in the year you make
the charge. The amount of your deduction may be limited depending
on the type of property given and the type of organization
to which it is given. Some contributions that you are not
able to deduct in the current year because of adjusted gross
income limits may be carried over to future years.