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Eight Tips for Claiming Charitable Deductions

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Posted by Burroughs, Moreland & Mudd CPA
Bay Leader

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Photo by Rikkis Refuge

You’re a charitable person. You give to your church or non-profits or a cause. You are eligible to itemize those charitable contributions on your tax return. But make sure you properly document your giving.

The IRS has provided eight tips to help make sure your contributions pay off:

  • You must give to a qualified, non-profit organization. You cannot deduct contributions made to specific individuals, political organizations and candidates.
  • If you receive a benefit because of your contribution such as merchandise, tickets to a ball game or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received.
  • Donations of stock or other non-cash property are usually valued at the fair market value of the property. Clothing and household items must generally be in good used condition or better to be deductible. Special rules apply to vehicle donations.
  • Fair market value is generally the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.
  • Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For text message donations, a telephone bill will meet the record-keeping requirement if it shows the name of the receiving organization, the date of the contribution, and the amount given.
  • To claim a deduction for contributions of cash or property equaling $250 or more you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization showing the amount of the cash and a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift.
  • Taxpayers donating an item or a group of similar items valued at more than $5,000 must also get an appraisal by a qualified appraiser.

If you want thorough and professional help getting all the deductions and exemptions for which you are eligible, contact Burroughs, Moreland & Mudd, CPA of Charlotte Hall, Maryland at 301-884-4641.

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