When it comes to tax deductible donations, there are several charitable contributions that qualify to help lower your tax bill. Here are some tips to make sure your contributions give you the most payoff on your return.
Tips on tax deductions for donations
1. Make sure you are giving to a qualified organization, like these five national charities for donation pick up. Contributions made to specific individuals, political organizations or candidates cannot be deducted. See IRS Publication 526, Charitable Contributions, for rules on what counts as a qualified organization.
2. Donations of stock, land, art or other non-cash property are usually valued at the fair market value (price a willing buyer would purchase it for) of the property. Clothing, household items and electronics must be in good or great used condition to be deductible. Special rules apply to vehicle donations. Check out Niconail’s post on how to determine tax deduction value of donated items for more information. If your total for all noncash contributions is over $500, you must complete attach IRS Form 8283, Noncash Charitable Contributions, to your return.
3. If you receive a good in exchange for your donation such as a vacation, tickets to a show or other services, you can deduct only the amount that exceeds the fair market value of the good received.
4. To deduct a cash, check or other monetary donation, you must be able to provide a bank record, payroll deduction record or other documentation from the organization. If the donation is $250 or more, the documentation must have a description of the contribution and if you received any goods in return.
5. If you are donating a single item or a group of similar items valued at more than $5,000, you must submit an appraisal by a qualified appraiser.
6. To deduct any charitable contribution of any amount, you must file Form 1040 and itemize deductions on Schedule A. Your tax preparer or online service will have these available for you.
What unique tax deductible donations did you make this year?