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Tax deductible donations

Tax deductible donations

Tax deductible donations can help you keep more of your money. Keep these things in mind when planning for your charitable contributions”

1. Contributions are deductible in the year made. Pay attention to whether you are using a credit card or mailing your donations to your charitable organization of choice. As long as you charge the donation to a credit card in 2013 the contribution will count for a tax deduction in 2013. For checks, you need to mail the check in 2013 for the donation to count in 2013. It is better to send these donations by certified mail etc. that records the date mailed.

2. Check that the organization is eligible. Only donations to eligible organizations are tax-deductible. Check with the IRS that the organization you are planning to contribute to is eligible to receive deductible contributions. These organizations include churches, synagogues, temples, mosques and government agencies.

3. Itemize your deductions. For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). Use the 2013 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction. A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceed the standard deduction.

4. Get a receipt. Remember to document your deducting. You may need to prove to the IRS that you made the deduction. Chances are you won’t recall what you donated when the IRS finally decides to audit you. The receipt from the charity 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, as well as 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.

5. Vehicle donations. The deduction for a car, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C or a similar statement, must be provided to the donor by the organization and attached to the donor’s tax return.

 

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My blog posts are NOT LEGAL ADVICE. They are for informational purposes only. Actual legal advice can only be provided after you have signed an engagement letter. This information does not create an attorney client relationship. Without attorney client privilege you could divulge information that can hurt your legal rights in the future. I can answer your tax questions in person in Miami and West Palm Beach Florida.
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