Now that holidays are just around the corner you might be looking to make a donation to one or a few charities. One of the questions you will likely have is whether or not the donation is deductible to you.
First of all, make sure all transactions are made before December 31 in order for them to be included on your 2014 tax return. You will only be able to deduct costs if you charge the item(s) to your credit card before the end of the year. If you prefer to write checks, that amount can also be deducted as long as the check is postmarked by December 31. Of course, there are more specific rules and limitations on donations you must follow.
In order for donations of either money or property to be deducted the recipient must be on the list of qualified groups approved by the Internal Revenue Service. You can determine eligibility using the Exempt Organizations Select Check Tool. This requirement does not apply to religious institutions and government agencies as all donations to such groups are deductible. However, to deduct any donations of money to charities you must provide proof of receipt from the charity stating the charity’s name and the date and amount of the contribution. If the donation exceeds $250, you are required to provide additional information.Donations by payroll deduction require that you retain the corresponding pay stub and a wage statement from one’s employer.
Donations of items have more specific rules depending on the type of item and their value. Any donations of automobiles, boats, and airplanes also require special reporting. On the other hand, for donations of items, such as household items and clothing, it is required that the items be in at least good used condition in order to qualify for a deduction. For more information on gifts and charitable contributions visit www.irs.gov or watch the video below.
Please note that the information provided is very general and should not be used as a guide in preparing your return. If you have any questions please consult a tax professional or call us at (310) 534-5577.
