The IRS has specific guidelines with regard to the tax deduction of charitable donations, including what is and is not deductible, limitations on deductions, and how deductions are to be documented.
Commonly
Overlooked Contributions
Most
people know that cash contributions to qualified charitable
organization
are deductible if you itemize your deductions. However, did you
know
about other non-cash contributions? If you volunteer your time for an
organization,
the value of your services is not deductible but all of your
out-of-pocket
expenses, to include mileage, is deductible. If you drive your vehicle
for a charitable purpose, you can deduct several cents per mile as a
charitable
contribution.
Did you clean out your closets and drop off bags of clothing at the Salvation Army or Goodwill Store? The cash value of those items is a deductible charitable contribution.
Contributions of property to a charitable organization are allowed to the extent of the propertys fair market value as well. For example, you have stock that has appreciated in value over the years. Instead of selling the stock and paying tax on the gain, donate the stock itself. You can take a deduction for the appreciated value on your tax return, provided you limit the deduction to 30% of your adjusted gross income. This rule applies to all capital assets you contribute.
When making a charitable contribution of $250 or more to one qualified charitable organization, you must receive written acknowledgment from the organization before you file your income tax return and claim the deduction. Separate contributions of less than $250 to the same charitable organization do not require written acknowledgement.
As tax professionals, we are knowledgeable in these areas and can direct you in proper handling of cash donations, personal property donations and even real property donations, in an effort to take advantage of the full limitations allowed by law.
Use
our Donations Worksheet to assist
you
in preparing to file you taxes..