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Ten Tips for Deducting
Charitable Contributions
When preparing to file your federal tax return, don’t forget your
contributions to charitable organizations. If you made qualified
donations last year.
The following is my top ten list to help ensure your contributions
pay off on your tax return.
1.
Contributions must be made to qualified organizations to be
deductible. You cannot deduct contributions made to specific
individuals, political organizations and candidates.
2.
You cannot deduct the value of your time or
services. Nor can you deduct the cost of raffles, bingo or other
games of chance.
3. If
your contributions entitle you to merchandise, goods or services,
including admission to a charity ball, banquet, theatrical
performance or sporting event, you can deduct only the amount that
exceeds the fair market value of the benefit received.
4.
Donations of stock or other property are usually
valued at the fair market value of the property. Special rules apply
to donation of vehicles.
5.
Clothing and household items donated must
generally be in good used condition or better to be deductible.
6.
Regardless of the amount, to deduct a contribution of cash, check,
or other monetary gift, you must maintain a bank record, payroll
deduction records or a written communication from the organization
containing the name of the organization, the date of the
contribution and amount of the contribution. For donations by text
message, a telephone bill will meet the record-keeping requirement
if it shows the name of the organization receiving your donation,
the date of the contribution, and the amount given.
7.
To claim a deduction for contributions of cash or
property equaling $250 or more you must have a bank record, payroll
deduction records or a written acknowledgment from the qualified
organization showing the amount of the cash and a description of any
property contributed, and whether the organization provided any
goods or services in exchange for the gift. One document may satisfy
both the written communication requirement for monetary gifts and
the written acknowledgement requirement for all contributions of
$250 or more.
8.
If your total deduction for all
noncash contributions for the year is over $500, you must complete
and attach IRS Form 8283, Noncash Charitable Contributions, to your
return.
9.
Taxpayers donating an item or a
group of similar items valued at more than $5,000 must also complete
Section B of Form 8283, which requires an appraisal by a qualified
appraiser.
10.
To deduct a charitable
contribution, you must file Form 1040 and itemize deductions on
Schedule A.
Michael T. McCormick, JD, LL.M.
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