It’s nearing the end of the year already, and many individuals and businesses find themselves donating gifts to charity. If you’re among them, do not neglect all the recent tax law provisions put into effect, however.
Make sure you keep these in mind:
Charitable Contributions of Household and Clothing Items
According to the IRS, a “household item” includes furniture, furnishings, electronics, appliances and linens. All household and clothing donations generally must be in “good used condition” or better in order to be considered tax deductible. If you’re claiming a deduction of over $500, you don’t have to meet this standard if you include a qualified appraisal of the item with your tax return.
For all gifts worth $250 or more, you must have a written acknowledgment from the charity, which must include, among other things, a description of the items donated.
In order to deduct any donation of money, regardless of the amount, you must have a bank record or a written statement from the charity. This record should include the name of the charity and the date and the amount of the contribution. Monetary donations include those made in cash, or by check, electronic funds transfer, credit card and payroll deduction.
- Make sure that the charity is qualified and eligible. Only donations to eligible charities are tax deductible.
- Contributions are only deductible in the year they are made. Therefore, donations charged to a credit card before the end of 2015 will count for 2015, even if the credit card bill isn’t paid until 2016. Also, checks will count for 2015 as long as they are mailed in 2015.
- Record your donations. For all donations, ask the charity for a receipt with the name of the charity, date of donation and a description of the donated property. If you leave a donation at an unattended drop site, keep a written record of the donation including the fair market value of the property at the time of donation. There should be a number on the donation bin that you can contact in order to receive your receipt.