The IRS has become more and more strict over the last few years regarding what can be deducted for charitable contributions. Here are a few tidbits of information you need to be aware of when planning your charitable contributions and when you get your charitable contribution information together for your tax returns.
• The organization must be a “qualified” charity. There is a list which can be found on IRS.gov in IRS publication 78. Churches, synagogues, temples, mosques and government agencies are eligible even if they are not listed.
• Donations in cash may be deducted IF you have a bank record or a receipt from the charity. Small amounts put in collection plates or donation jars or buckets cannot be deducted unless you have a receipt or a cancelled check.
• Donations of over $250 must have a receipt from the charity. A cancelled check is not enough.
• For donations of property you must maintain a written record of what the property is, its condition, and the name of the charity and the date, along with the fair market value at the date you gave it. You should get a receipt from the charity as well. There is a good worksheet to use on the forms page on my website http://johngallocpa.com/forms/.
• If your contributions of property exceed $500 you must fill out an additional form to file with your tax return. Form 8283 Non Cash Charitable Contributions.
• If your contributed property is worth more than $5,000, you must also have an appraisal from an appraiser qualified to value that type of property.
• Your time or labor donated to a charitable organization is not deductible.
• Your mileage is deductible at .14 per mile, but you must maintain records and if it is more than $250 you must have a receipt from the charity.
• Items you purchase for a charity must also have a receipt from the charity to be deducted if they exceed $250.
• Vehicles donated are limited to the gross proceeds from the sale by the charity if over $500. You should receive a statement (1098-C) from the charity.
• All receipts from charities must state on them that you did not receive anything of value in return for the contribution, or it is not deductible.
