Charitable Deductions Tips

If you’ve made cash and/or non cash charitable contributions over the year, now is the time to review your documentation by going through your check register, credit card statements, receipts and mileage logs. A few tips along the way:

  1. Obviously, the recipient must be a tax-exempt, 501(c)(3) charity. Giving money or goods to your neighbor in need does NOT qualify for a deduction. If you want to help a needy neighbor, donate these items to your church and have the church assist them.
  2. If you donated $250 or more to a single charity, make sure you get an acknowledgement letter from the organization. Also, make sure the phrase “No goods or services were provided in exchange for this donation” appears on the acknowledgment receipt. This is very important, as deductions have been disallowed in the past if this phrase was missing! 
  3. If you donated a vehicle or boat valued at $500 or more to a charity make sure the charity issues you a Form 1098-C so that you can deduct the donation.
  4. If you volunteer for a charity, don’t forget to track your miles driven in the line of your charitable work. Also, if you incur out-of-pocket expenses (printer ink, office supplies, etc) that were not reimbursed, you can deduct them as cash donations.
  5. Purchasing raffle tickets is not deductible as charity. Neither is buying Girl Scout cookies. 🙂
  6. If you wish to claim more than $500 in non cash charitable contributions, be prepared to give your tax preparer additional information, such as name of the charity, date donated, items donated, approximate purchase dates and prices, etc.
  7. If you received something for your donation, say a gift or a dinner, your donation must be reduced by the value of that gift.  For example, if you purchased a $100 dinner to a fundraising event, you’re allowed to donate the $100, LESS the value of the dinner. To avoid any issued, now most charities will now list the value on the ticket.
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