It was Thanksgiving, you were stopped at the light, and you gave the homeless guy $20.00
Or, you moved last year, and that stuff that didn't move with you that was sitting in the corner? It made its way to the donation center drop off
Now its time to do your taxes. What is a nice guesture? What can you write off?
Here are the basic rules for making tax deductible charitable contributions -
1. The charitable organization has to be approved by the IRS. You can see if they are approved by checking the website <CLICK HERE>
2. Services are not deductible. If you volunteer at the soup kitchen, you can't deduct the value of your time.
3. You need to document your donation. You need to keep a cancelled check, or have a written acknowledgement for any single contribution of more than $250
The requirements for documentation are
a. the name of the organization that you are making the donation to,
b. if you are getting anything in return,
c. a description and "good faith" estimate of the value of the items that you are donating.
If you donate clothes or household items, you will never know what the Charity ultimately sold them for, thus there will always be a difference between the donor's charitable deduction and the charitable organizations income.
The best thing to do is to have all of your documentation about your donation
What was it? When did you buy it? Where did you buy it? How much did you pay for it? What condition was it in when you donated it?
Even better - set aside some of that I Cloud storage for your tax records - take some pictures of your donations.
Doug Zandstra CPA CFE EA
Certified Public Accountant
Certified Fraud Examiner
29 Pearl St NW, Ste 225
Grand Rapids, MI 49503616 970 3000