| May 7, 2012 | 0 Comments

Deducting Charitable Contributions may help reduce you tax burden if you keep good records and have the information that is needed should you be audited.  A legitimate deduction must be given to a qualified organization.  You CANNOT claim a deduction made to a specific individual, political organizations or candidates.

To use this deduction you must file Schedule A(Long Form) and if the a non-cash contribution is more thatn $500. other forms must be completed.  There are basically two types of contributions: CASH and NON-CASH.  The additional forms will be completed when your return is prepared.

If you receive a benefit when contributing such as merchandise or tickets then you can only deduct the the amount that exceeds the fair market value of the benefit received.  Donations of stock or other non-cash property is valued at  fair market value.  Regardless of the amount cash donated you must maintain written records. These records  can be in the form of bank records, payroll deduction records or communication from the organization receiving the donation. Donations of $250.00 or more you will need written documentation from the organization.

If the donation  of non-cash items are valued at  $5000. or more you will need a appraisal.  Most organizations can help with information on obtaining appraisals.  The appraisal should be enclosed with your tax information for the donating year.

Non-cash donations will need a signed receipt from the organization listing the date, items donated and value.  Most organization such as Goodwill or the Salvation Army have listings available giving the estimated amount to be claimed per item.  When making donations of this sort, make a handwritten listing of the items such as 3 dresses at $4.00, etc.  Attach this listing to your receipt.  Keep all receipts in your TAX DECUCTION folder to be used at tax time.

Another charitable donation is the mileage when you volunteer.  Keep a log according to date, function and miles driven.  These miles add up.

It all “Boils Down” to good record keeping.  Remember you are responsible for producing these records if the IRS calls.




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