Tax Tips for Charitable Donations

Published On - February 20, 2020

admin

Tax Tips for Charitable Donations

Tax Tips for Charitable Donations

If you’re considering making a charitable donation by the end of this year, you’ll probably want to claim it as a tax deduction. If so, you must itemize the deduction. This is an important requirement you’ll need to follow. Read on to learn more details.

  • You can only deduct donations you give to authorized charities. Call the organization if you’re not sure if they are qualified. Keep in mind that you’re probably safe deducting any contribution to religious or government agencies.
  • Monetary donations can be made by check, credit card, electronic bank transfers, cash or a payroll withdrawal. Be sure to have it documented in writing or have a receipt from the charity before you deduct the gift on your tax return. The document must include the name of the charitable agency, the date and the amount of the gift. A bank record could be a canceled check or a credit card bill.
  • If you contribute by payroll deduction, save your pay stub, a W-2 form or documentation from your employer. The statement must record the total amount withheld along with a pledge card indicating the name of the charity.
  • Household gifts include furniture or furnishings, appliances, electronic items and linens. If you’re donating clothing or household pieces, they should be in good condition to claim the item as a tax deduction. A deduction exceeding $500 doesn’t apply to this requirement if you have an eligible appraisal of the gift to file with your return.
  • You must obtain a form of acknowledgment from the charity for your donation of property or money. This record can be in addition to receipts for deducting monetary donations. A single statement may also be enough to meet all the deductible requirements.
  • You can deduct donations for the year in which you make them. If you use a credit card before the end of the year it will count for that year, regardless of when it is paid. A check written and mailed by the year end also counts.
  • Special exceptions apply if you donate vehicles such as a car, boat or airplane.

For more information about deductible gifts or other questions about charitable donations, please contact one of our tax specialists at 608-233-9769.