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Four Things to Remember for Year-End Charitable Donations

Posted by Admin Posted on Jan 28 2015
  • Ensure that your donation is going to a qualified charity. Only donations made to eligible organizations are tax-deductible. SELECT CHECK is a searchable online tool provided by the IRS which lists most organizations that are eligible to receive deductible contributions.
  • Contributions are deductible in the year made. This means that donations made by credit card before the end of 2014 are deductible in 2014, even if the credit card bill was not paid until 2015. The same is true for checks that are mailed before the end of 2014, even if they are not received until 2015.
  • For individuals, only taxpayers who itemize deductions on Form 1040 Schedule A can claim deductions for qualified charitable contributions! Deductions for charitable contributions are not available to individuals who choose the standard deduction on their tax return. Be sure to use Form 1040 Schedule A to determine whether itemizing your deductions or taking the standard deduction provides a greater tax benefit to you.
  • Keep a record of all noncash contributions and donations of property. This includes items such as clothing and household goods. Request a receipt from the charity which includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated items and fair market value of the property at the date the donation is made. In addition, the taxpayer will also need to report the original cost of the item donated. If you are unable to obtain a receipt, please keep your own records of this information. Keep in mind that additional rules may apply based on the dollar valuation of certain noncash contributions.