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Fair Market Value of Charitable Donations: English | Spanish | ASL
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Individuals and businesses making contributions to charity should keep in mind some key tax provisions that have taken effect in recent years, especially those affecting donations of clothing and household items and monetary donations.
Rules for Clothing and Household Items
To be deductible, clothing and household items donated to charity generally must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances and linens.
Guidelines for Monetary Donations
To deduct any charitable donation of money, regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.
Donations of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. For payroll deductions, the taxpayer should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.
These requirements for the deduction of monetary donations do not change the long-standing requirement that a taxpayer obtain an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. However, one statement containing all of the required information may meet both requirements.
Reminders
To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following additional reminders:
- Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2012 count for 2012. This is true even if the credit card bill isn’t paid until 2013. Also, checks count for 2012 as long as they are mailed in 2012.
- Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. Exempt Organization Select Check, a searchable online database available on IRS.gov, lists most organizations that are qualified to receive deductible contributions. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even if they are not listed in the database.
- For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceed the standard deduction. Use the 2012 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.
- For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value. Additional rules apply for a contribution of $250 or more.
- The deduction for a motor vehicle, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C, or a similar statement, must be provided to the donor by the organization and attached to the donor’s tax return.
- If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.
- And, as always it’s important to keep good records and receipts.
IRS.gov has Additional information on charitable giving including:
- Charities & Non-Profits
- Publication 526, Charitable Contributions
- Online mini-course, Can I Deduct My Charitable Contributions?
Rizzo. If obummy wants to fix roads and bridges where is the proposal for a bill? Look at how fast other junk gets passed. Btw how are we gonna pay for roads and bridges when we have a trillion dollar budget hole and 20 trillion in debt? Steal it from Medicare like Obamacare?
http://pfds.opensecrets.org/N00000245_2010.pdf
For example, Kevin apparently failed to appreciate that Mr. Sommers used the wrong case of "who" in the preantepenultimate line of his comment. It should not have been "whom," since the word was used in the nominative case -- as the subject of a dependent clause -- calling for "who." Furthermore, although Kevin attacks the use -- or lack -- of commas by Mr. Sommers, Kevin misplaces them. In this country, commas and periods are virtually always placed inside quotation marks, not outside, as Kevin incorrectly placed them. (Of course, I am assuming Kevin is not posting from his country estate in the Cotswolds.)
And where will the funds come from since we don't have any money to spend? You veer off course and attack tax rates but you neglect to mention that individual inc taxes paid after Bush cuts hit a record high in 2007 when we also had 4.5% unemployment. If Bush put everything on a credit card, then Obama must be using one card to pay off each other card that is tapped out. Since BO was sworn in he added $6 trillion to the debt. It's a shame that the facts don't lie but feel free to make excuses, duck the real problem which is spending and make up stories. Go ahead and raise the rates on the rich. The $80B a year will pay for a week's worth of Obama spending and still won't fix any roads or bridges or create any jobs. Then what will you use as an excuse for failure? If we borrow to pay for government but won't cut government spending, then what? In 2008, Obama said the debt was irresponsible and unpatriotic when everyone owed $30k each. now we all owe over $50k each. Is it still irresponsible and unpatriotic? FACT - when you hit the debt ceiling, it means you have maxed out your borrowing capacity and have not paid back the principal. Who thinks the solution to this is to borrow more money?
Since Germany has probably one of the strongest economies at the moment in the EU. http://www.parmentier.de/steuer/steuer.htm?wagetax.htm If it doesn't automatically put in the numbers I did, here they are. Cat IV ( married with equal incomes. 2 kids Gross yearly salary =120000 euro ( equal to $160000 US) Total taxes( Income & Social Security) paid = 52,528.50 euro ( $69,590.00 US) 43% And then deduct another 19.5% VAT (common to all EU countries) for everything they purchase with that net after tax income. Do you pay 43% in total federal income taxes ?
Americans going bankrupt from medical is nothing more then BS propoganda. Has been debunked time and again. Why do people like yoiu insist on saying something is free? Do the doctors work for no pay in Europe ? How about the college professors ? Did I miss that in the news reports ? And yes, many countries now charge a small premium in addition to the taxes collected to cover that "free" healthcare. Germany charges 8% of wages. What services do they get that I could only dream about ? Please enlighten me ? PS - I work with Europeans, I've worked there, and I have family that still lives there. So spare me the BS remarks about where I get my info.
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