Charitable Deduction Receipts
The lovely IRS has changed the rules again on deducting charitable giving. Yep, you now have to have charitable deduction receipts and follow new rules.
Charitable Deduction Receipts
You will get more than just a fuzzy feeling when you donate to a charity this year. Not only will you be helping the greater good, but also yourself. Keeping receipts from charitable donations you have made can count as a vital tax deduction. For every donation you make, whether it be to Goodwill or your local church, you must keep a receipt. When you submit your deductions while filing taxes, you must itemize your list. You must list every donation, along with exactly what was donated is to be included. Unfortunately, simply stating that you donated forty dollars worth of clothing to Goodwill will not suffice. You must state that you donated two sweaters and two pairs of jeans.
For your charitable contributions to be eligible for deduction, you must donate to a ‘qualified organization.’ Qualified organizations typically include nonprofit organizations such as churches, Salvation Army and even a high school raffle. Each of these organizations will provide you with a receipt and the value of your donation. Keeping receipts of charitable donations is especially imperative if your donation is valued over $250. If under $250, often a cancelled check will suffice. If you donate material, such as clothing or any other no monetary goods, tax deductions will always require receipt from the receiving organization. This receipt will also state what, if anything, you received in return. For example, if you donate $250 to a charity dinner, with a dinner value of $20, then your donation was $230.
In addition to cash and small material possessions, property may be donated. If this is the case, you must receive a detailed statement from the receiving organization. This will act as your receipt. If your donation is valued at over five thousand dollars, you must obtain appraisal approval from a certified professional.
No matter how charitable you are, you can only deduct up to 50% of your adjusted gross income for each tax year. In addition, time spent volunteering does not count as a charitable deduction. In general, you can deduct any costs you incur as a result of volunteering. If you must buy a uniform, you can deduct that from your taxes. You can deduct the amount of gas or the amount a bus fare cost you to travel to your volunteering destination.
To receive your deductions, you must fill out a 1040 form and itemize your charitable deductions in schedule A. No matter how large or small a donation, always acquire a receipt. These receipts are proof of a charitable deduction that can repay you greatly come tax time!