Many people give to charity each year during the holiday season.
Remember, if you want to claim a tax deduction for your gifts, you must itemize
your deductions. There are several tax rules that you should know about before
you give. Here are six tips from the IRS that you should keep in mind:
1. Qualified
charities. You can
only deduct gifts you give to qualified charities. Use the IRS Select Check tool to see if the group you give to is
qualified. Remember that you can deduct donations you give to churches,
synagogues, temples, mosques and government agencies. This is true even if
Select Check does not list them in its database.
2. Monetary
donations. Gifts of
money include those made in cash or by check, electronic funds transfer, credit
card and payroll deduction. You must have a bank record or a written statement from
the charity to deduct any
gift of money on your tax return. This is true regardless of the amount of the
gift. The statement must show the name of the charity and the date and amount
of the contribution. Bank records include canceled checks, or bank, credit
union and credit card statements. If you give by payroll deductions, you should
retain a pay stub, a Form W-2 wage statement or other document from your
employer. It must show the total amount withheld for charity, along with the
pledge card showing the name of the charity.
3. Household
goods. Household items include furniture, furnishings,
electronics, appliances and linens. If you donate clothing and household items
to charity they generally must be in at least good used condition to claim a
tax deduction. If you claim a deduction of over $500 for an item it doesn’t
have to meet this standard if you include a qualified appraisal of the item
with your tax return.
4. Records
required. You must get an acknowledgment from a charity for each deductible donation (either
money or property) of $250 or more. Additional rules apply to the statement for
gifts of that amount. This statement is in addition to the records required for
deducting cash gifts. However, one statement with all of the required
information may meet both requirements.
5. Year-end
gifts. You can
deduct contributions in the year you make them. If you charge your gift to a
credit card before the end of the year it will count for 2014. This is true
even if you don’t pay the credit card bill until 2015. Also, a check will count
for 2014 as long as you mail it in 2014.
6. Special
rules. Special rules apply if you give a car, boat or airplane to
charity. For more information visit IRS.gov.
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