Nothing to get you in the holiday mood like some nice, cheerful talk about taxes, is there?
Fortunately, the IRS is less naughty than nice around this time of year. Your year-end charitable deductions can get you a bit of a break on your taxes – if you fill out all the right forms, make your list and check it twice. Some important tax law revisions have taken place over the past few years, and you need to make sure you’re up to date.
Here’s what you need to know about charity deductions…courtesy of the jolly old IRS.
So You Want to Donate Money.
We’re talking cash, checks, electronic funds transfer, credit cards, and/or payroll deduction. Any kind of money.
In order to get any kind of a deduction, you MUST have a bank record or a written statement from the charity. It has to show the charity’s name, the date you donated, and the amount of your contribution. (Payroll deductions are a bit of a special case: you’ll need to show a pay stub, a W-2 form from your employer that shows the total amount, and the pledge card from the charity.
Note: This hasn’t changed the IRS’ long-standing requirement that you get acknowledgement from a charity for each donation worth over $250. But, and we quote, “one statement containing all the required information may meet both requirements.”
So You Want to Donate Clothing or Household Items.
Furniture, electronics, appliances – it all falls under this heading. In order to be considered tax-deductible, these donations must be in “good used” condition. (However, if the donation is officially appraised as worth over $500, it doesn’t have to be in “good used” condition. Make up your own scenario.)
As per usual, donors must get a written acknowledgement (plus a description) from the charity for any donation worth $250 or more… so everything stays aboveboard.
So You Want to Donate Something Giant Like a Boat.
If you donate a car, boat or airplane to charity, you should receive Form 1098-C from the lucky organization that’s getting your vehicle. That form will be attached to your tax return.
The deduction for your car, boat or airplane is usually limited to the gross proceeds from its sale – unless its claimed value is less that $500. (If you own an airplane worth less than $500, we can see why you’d want to get rid of it.)
Things You Should Remember Before Donating:
For even more holiday fun with the IRS, you can check out these additional resources!
If you have any questions about year-end charitable deductions – or have a present for us –give us a call at 844-841-9857, or schedule a free consultation here.
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