Hints for Holiday charitable giving

Hints for Holiday charitable giving

POSTED: Monday, November 21, 2011 - 11:43am

UPDATED: Sunday, January 8, 2012 - 4:25pm

Any discussion on charitable giving during the holidays has to start with a warning. Watch out for scams! Scam artist are active year round trying to steal your money or your identity or both. Don’t let them take advantage of your good intentions. Research unfamiliar organizations with the IRS (see the tip below), check with the Better Business Bureau and the state attorney general’s office.

Now here are some reminders on tax law provisions that individuals and businesses should keep in mind when making contributions to a charity.

- Contributions are deductible in the year made. Thus, donations charged to your credit card before the end of 2011 counts for 2011. This is true even if the credit card bill isn’t paid until 2012. Also, checks count for 2011 as long as they are mailed in 2011 and clear, shortly thereafter.

-Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions. The searchable online version can be found at www.IRS.gov. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even if they are not listed in Publication 78.

- For individuals, you must be able to who itemize your deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available if you choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). You will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) are more than the standard deduction.

-For all donations of property, including clothing and household items, get a receipt from the charity, if possible. The receipt should include 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. Also include 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.

-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.

For additional information on charitable giving, click here.

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