It's September and it's the perfect time of year to start thinking about charitable donations. A lot of us donate clothes, shoes and other unused household items to places like Goodwill or the Salvation Army. You may also donate to your favorite charities or religious organization too. We'll be talking about what can or can't be donated to who it may or may not be donated and how to keep proper records.
Cash Donations
You may only donate cash to IRS qualified exempt organizations. The EO Select Checklist will help you determine if your preferred charity qualifies. If you donate cash but receive a benefit such as advertising in a local magazine you must reduce the deductible amount by the value of the benefit received. For example, you donated $100 to the city magazine in return for a small ad in the back. If the ad is valued at $40, your $100 contribution will be reduced to $60.
Remember to always keep a written transaction of your donations. This could be a cancelled check, bank record or written record from the organization.
Remember to always keep a written transaction of your donations. This could be a cancelled check, bank record or written record from the organization.
Non-cash Donations
Personal property such as clothing and household items can be donated as long as they are in good usable condition. If you donate more than $250 worth of items you must keep a written record. Donating more than $500 in value will require Form 8823 to be filed with your tax return. A donation of $5000 or more will require an appraisal of the item being donated and the appraisal will need to be attached to your tax return. Appraised items will also be listed on Form 8823.
Vehicle donations must have a 1098-C attached to your tax return. Vehicles do not necessarily need to be in working condition to be deductible.
Vehicle donations must have a 1098-C attached to your tax return. Vehicles do not necessarily need to be in working condition to be deductible.
Limits on Contributions
Depending on your income, your ability to claim a deduction of charitable giving may be limited. Currently, if you are filing joint, you may have an AGI up to $311k before being limited (AGI is less for single and head of household filers).
If your AGI is above the AGI threshold your contributions may be limited to 20%, 30% or 50% of your AGI depending on the type of property given and the type of organization given to.
Remember, always consult your tax professional or use my contact form for inquiries.
Your Mobile Tax Pro,
Liz
If your AGI is above the AGI threshold your contributions may be limited to 20%, 30% or 50% of your AGI depending on the type of property given and the type of organization given to.
Remember, always consult your tax professional or use my contact form for inquiries.
Your Mobile Tax Pro,
Liz
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