July 7, 2022

Art & Lifestyle:

Even More Tax Tips

tax filing
Posted by Diana Little
Beacon Financial
Leading Edge

Photo by MoneyBlogNewz

If you make a donation to a charity this year, you may be able to take a deduction for it on your 2011 tax return.  Here are the final three of the top nine things the IRS wants every taxpayer to know before deducting charitable donations. Click here to see Tips 1 – 3 and Tips 4 – 6.

7.       When you receive something in return. If your contribution entitles you to receive merchandise, goods or services in return – such as admission to a charity banquet or sporting event – you can deduct only the amount that exceeds the fair market value of the benefit received.

8.       Large donations.  For any contribution of $250 or more, you need more than a bank record. You must have a written acknowledgement from the organization.  It must include the amount of cash and say whether the organization provided any goods or services in exchange for the gift.  If you donated property, the acknowledgement must include a description of the items and a good faith estimate of its value.  For items valued at $500 or more you must complete Form 8283, Noncash Charitable Contributions, and attach the form to your return.  If you claim a deduction for a contribution of noncash property worth more than $5000, you generally must obtain an appraisal and complete Section B of Form 8283 with your return.

9.       Tax Exemption Revoked.  Approximately 275,000 organizations automatically lost their tax-exempt status recently because they did not file required annual reports for three consecutive years, as required by law. Donations made prior to an organizations automatic revocation remain tax-deductible. Going forward, however, charities that are on the auto-revocation list that do not receive reinstatement are no longer eligible to receive tax-deductible contributions. For the list of organizations whose tax-exempt status was revoked, visit www.IRS.gov.

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