As the last two major holidays of the year loom over the horizon, ‘tis the season in which many of you probably give to charities. Now you might be giving just from the kindness of your heart with no expectation of anything in return, and that’s great. That’s completely awesome as a matter of fact.
But don’t forget that you can claim tax deductions for those gifts. The goal here is to itemize each gift you plan to deduct. There are numerous tax regulations available for giving to charity, but here are the top six from the IRS you should get familiar with.
- Give to Qualified Charities – Only gifts given to qualified charities can be deducted. The IRS has a Select Check Tool you can use to verify if the charity is qualified. Regardless, any donations you give to churches, synagogues, temples, mosques, or government agencies can be deducted, even if it isn’t listed within the Select Check.
- Monetary Gifts – These include gifts of money in the form of cash, check, electronic funds transfer, credit card, or payroll deduction. To deduct any gift of money from your return, you must have a written statement or bank record from the charity – no matter how large or small the amount was. The statement has to show the name of the charity, the date the gift was given, and the amount. Bank records can include voided checks, or bank, credit card, or credit union statements. You can use a pay stub, a W-2, or other documents from your employer if you give through payroll deductions. Make sure the total amount withheld is shown along with the name of the charity.
- Donating Household Items – These items are generally furniture, clothing, furnishings, electronics, appliances, and linens that are in good, used condition. If an item has a deduction of $500 or more, it doesn’t necessarily need to be in good condition, but a qualified appraisal for the item should be included in your tax return.
- Proof of Giving – With each deductible monetary or property donation of $250 or more, you are required to get some sort of record acknowledgement from the charity. This recognition is in addition to the statement given for monetary gifts, though one statement with the required information can suffice.
- End-of-Year Gifts – It’s possible to deduct contributions within the same year you made them. If your gift was charged to a credit card right before the end of 2015, it can still be counted within the 2015 tax year even if you don’t get the bill until 2016. The same can be said for mailed checks as long as the postmark is within 2015.
- Special Rules – For those with the most generous of hearts donating various vehicles to charities, there are special regulations which can be found at the IRS website.
While giving to charities may put you on Santa’s nice list, your deductions aren’t going to do any good if they aren’t prepared around tax time. Give yourself the gift of extra time by e-filing a tax extension with ExpressExtension. Our live tech support in Rock Hill, South Carolina is ready to assist. Call us at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m., EST. We also offer 24/7 email support at [email protected], and live chat at www.expressextension.com.