Many people give to charity each year during the holiday season. Remember, if you want to claim a tax deduction for your gifts, you must itemize your deductions. There are several tax rules that you should know about before you give. Here are six tips that you should keep in mind and some of my suggestions on donations:
1. Qualified charities. You can only deduct gifts you give to qualified charities. Feel free to contact my office to see if the group you give to is qualified. Remember that you can deduct donations you give to churches, synagogues, temples, mosques and government agencies.
2. Monetary donations. Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return. This is true regardless of the amount of the gift. The statement must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, or bank, credit union and credit card statements. If you give by payroll deductions, you should retain a pay stub, a Form W-2 wage statement or other document from your employer. It must show the total amount withheld for charity, along with the pledge card showing the name of the charity.
3. Household goods. Household items include furniture, furnishings, electronics, appliances and linens. If you donate clothing and household items to charity they generally must be in at least good used condition to claim a tax deduction. If you claim a deduction of over $500 for an item it doesn’t have to meet this standard if you include a qualified appraisal of the item with your tax return.
4. Records required. You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements.
5. Year-end gifts. You can deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2014. This is true even if you don’t pay the credit card bill until 2015. Also, a check will count for 2014 as long as you mail it in 2014.
6. Special rules. Special rules apply if you give a car, boat or airplane to charity.
7. Suggestions. I deal with a large number of very good charities if you would like suggestions. If you are looking in the healthcare field, Presence health has a wonderful foundation that does a ton of good in our community. You can donate online at http://www.reshealth.org/sub_rdf/donate_bb.cfm or by contacting Aleisha Stingley at 312.308.3228 or aleisha.stingley@presencehealth.org. If you are concerned about the epidemic of hunger in our country you can donate to www.feedingamerica.org.
I have many other great organizations that I recommend that can benefit from your donations. Please contact me and Happy Holidays!