1. You must itemize your deductions to write-off gifts to charity on your federal income tax return. Use Schedule A (Itemized Deductions) to report your contributions.
2. Give to qualified charities. You can only deduct gifts to a qualified charity. Use the "IRS Select Check" tool to see if the group is qualified. You can deduct gifts to churches, synagogues, temples, mosques and government agencies even if Select Check does not list them in its database.
3. Keep a record of all cash gifts. 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 take the deduction. 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.
4. Household goods must be in good condition. Household items include furniture, furnishings, electronics, appliances and linens. These items must be in at least good-used condition to claim on your taxes. A deduction claimed of over $500 does not have to meet this standard if you include a qualified appraisal of the item with your tax return.
5. Additional 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.
6. Year-end gifts. 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 2015. This is true even if you don’t pay the credit card bill until 2016. Also, a check will count for 2015 as long as you mail it in 2015 (i.e. postmarked on or before December 31).
7. Special rules. Special rules apply if you give a car, boat or airplane to charity. If you claim a deduction of more than $500 for a noncash contribution, you will need to file Form 8283 (Noncash Charitable Contributions) with your tax return.
Wayne Davies, EA, has been an individual and business tax return expert for 25 years and has personally prepared over 10,000 tax returns. Wayne specializes in providing tax reduction strategies to small business owners and the self-employed, including home-based business owners, freelancers, consultants and solo entrepreneurs. For a Free Report that reveals his “Top 10 Tax Deductions” (for small business owners & self-employed people only), visit http://selfemployedtaxdeductionstoday.com. For information on Wayne’s books, including the #1 Amazon Best-Seller, Small Business Tax Deductions Revealed, visit http://selfemployedtaxdeductionstoday.com/books. Wayne also provides accounting and payroll services for all business types (sole proprietorships, partnerships, corporations and LLC’s), as well as year-round tax planning. Contact Wayne at (260)480-7545, firstname.lastname@example.org, or on Facebook at https://www.facebook.com/GoodTaxPreparer.© 2015 Wayne M. Davies
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