Year-End Charitable Contribution
If you’re thinking about making a charitable contribution during the holiday season this year and want to claim a tax deduction for your charitable gifts, you must itemize your deductions.
This is just one of several tax rules or hurdles that you should know about before you give.
Here’s what else you need to know:
- Qualified charities. You can only deduct charitable contribution you give to qualified charities.
If you’re not sure if the organization you give to is a qualified organization, please use the free IRS Exempt Organizations Select Check Tool .
Remember that generally you can deduct donations you give to churches, synagogues, temples, mosques and government agencies.
- Monetary donations. A charitable contribution provided in cash or by check, electronic funds transfer, credit card and payroll deduction.
You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return.
This is true regardless of the amount of the gift. The statement must show the name of the charity and the date and amount of the contribution.
Bank records include canceled checks, or bank, credit union, and credit card statements.
If you donate through payroll deductions, you should retain a pay stub, a Form W-2 wage statement or another document from your employer.
It must show the total amount withheld for charity, along with the pledge card showing the name of the charity.
- Household goods. Household items include furniture, furnishings, electronics, appliances and linens.
If you are providing a charitable contribution of clothing and household items to charity they generally must be in at least good used condition to claim a tax deduction.
If you claim a deduction of over $500 for an item it doesn’t have to meet this standard if you include a qualified appraisal of the item with your tax return.
- Records required. You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more.
Additional rules apply to the statement for gifts of that amount.
This statement is in addition to the records required for deducting cash gifts.
However, one statement with all of the required information may meet both requirements.
- Year-end gifts. You can a deduct charitable contribution in the year you make them.
If you charge your gift to a credit card before the end of the year it will count for 2015.
This is true even if you don’t pay the credit card bill until 2016. Also, a check will count for 2015 as long as you mail it in 2015.
- Special rules. Special rules apply if you give a car, boat or airplane to charity.
For more information about the tax deductibility of a charitable contribution and other questions about charitable giving, please connect with Tax Samaritan.
Our goal at Tax Samaritan is to provide the best counsel, advocacy and personal service for our clients. We are not only tax preparation and representation experts, but strive to become valued business partners. Tax Samaritan is committed to understanding our client’s unique needs; every tax situation is different and requires a personal approach in providing realistic and effective solutions.
If you would like a quote, please click on the button below for a free, no obligation Tax Preparation quote and/or free 30-minute consultation to discuss your situation regarding your charitable contribution further:
Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).
Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.