6 Tax Tips for Deducting Gifts to Charity
Mother Teresa once said, “It’s not how much we give but how much love we put into giving.” The change of seasons often prompts people to donate items or money to charity; or if you are a part of a nonprofit organization, you may be seeking donations from current or prospective donors to support the mission and efforts of your group. Donors that choose to give may want to claim their donation as a tax deduction when filing. These are a few tips you should know prior to giving or receiving donations from a generous supporter.
Tax Tips for Deducting Gifts To Charity:
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Give to Qualified Charities – Only gifts given to qualified charities can be deducted. Gifts given to churches, synagogues, temples, mosques and government agencies are deductible. The IRS provides a Select Check tool that you can use to see if the group you want to donate to is qualified.
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Itemize Deductions – Itemized deductions are eligible expenses that individual taxpayers can claim on federal income tax returns which decreases their taxable income. Each qualified deduction should be itemized and listed.
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Keep Detailed Records – Bank records or a written statement from the charity is required for verification purposes of all donations. All gifts of money include those made in cash or by check, electronic funds transfer, credit card, or payroll deduction. For those that give by payroll deduction, have a copy of your pay stub, Form W-2 wage statement or another sufficient document from your employer.
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Condition of Household Goods – Household items such as furniture, furnishings, appliances, electronics, linens, and more, must be in at least good-used condition for it to be claimed on your taxes.
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End of the Year Gifts – Be sure to deduct contributions in the year that you make them. For example, if you purchase a gift and charge it to your credit card prior to the end of 2017, it will count for 2017. Even if the bill is not paid until January 2018, the deduction will still have to be for 2017.
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Large Property Donations – There are special rules that apply for large donations such as an airplane, boat, or car given to charity. Also, deductions that are claimed for non-cash contributions of more than $500 require IRS Form 8283 be completed for your tax return.
We hope these tips will be beneficial to you as you help others along the way throughout the year. As always, ExpressExtension is here to assist you with any tax return e-filing needs that you may have. We offer business, exempt organization, and personal extensions to give you extra time to prepare those taxes! If you have any questions or need assistance with the e-filing process, feel free to call our live, US-based support team in Rock Hill, South Carolina. We are available at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m. EST. You can also send us an email 24/7 through [email protected].
