Claim Charitable Donations For Tax Purposes
The IRS allows charitable donations to be deducted from your tax liability each year
. If you are trying to reduce the amount you owe to the Internal Revenue Service (IRS), a charitable donation may be claimed. Donating to charitable causes each year not only helps you in terms of taxes, but it also allows you to contribute positively to society and your community. There are many charities out there with amazing causes. Here are some things you should know before attempting to claim your deductions.
First, make sure that your contribution qualifies. Remember that you must donate property or cash to a qualifying organization. Check with the organization and make sure that your donation will qualify. Only those who itemize their deductions are allowed to take advantage of charitable contributions on their taxes.
Next, make sure that you keep proper documentation of the donation for the IRS. For cash contributions you must have supporting documentation. Likewise, you will be required to assess the fair market value for any property you donate. For non-cash contributions totally more than $500, IRS Form 8283 must be completed. A written appraisal must accompany any non-cash contribution more than $5,000.
If your cash contribution is less than $250, you just have to make sure you have a credit card statement, bank statement or cancelled check. For more than $250, you will need a written acknowledgement from the charity stating how much you contributed. For property, you must have a record of the charity with its address included. If the fair market value of your property is more than $500, you will need to make a written statement of how you obtained the property. For more than $5,000, you will need to get a qualified appraiser to provide a written statement.
If you have any questions about specific documentation, you should consult your tax advisor or accountant. Additional information is also available from the IRS. You can really help others by donating to a charity. Make sure the charity's mission matches your own views and desire to help. There are also typically additional state and federal tax qualifications for donations to schools or charities that help the working poor.
by: Mark Randall
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