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The year end tax deduction

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Yikes, just the word itself is enough to drive everyone away, but it is a fact of life that we all have to face. Taxes. Today, is December 30th and we are getting down to the wire for those last-minute tax deductions. My father was giddy 46 years ago today when my younger sister was born, because he received an extra tax deduction that year……and of course a beautiful baby girl. Inducing labor is probably the more difficult way to receive a tax deduction, charitable giving might be an easier path.

While, I am not a financial expert I did do a little research and thought it was worth sharing for those trying to wrap up their end of year donations.

Suggested Guidelines for Financial Donations

  • If you are planning on deducting any charitable donation of money, regardless of amount, you must have a bank record or credit card receipt and a letter in writing from the charity you donated too. The letter must show the name of the charity and the date and amount of the contribution and the organizations 501c3 non-profit status.
  • You must always obtain an acknowledgment from a charitable organization for any tax-deductible donation, whether it is money or property, of $250 or more.

Rules for Charitable Contributions of Clothing and Household Items

  • In order to be tax-deductible, clothing and household items donated to charity, must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to meet this standard, if a qualified appraisal of the item is included.
  • Donors must get a written acknowledgement from the charity for all gifts worth $250 or more that includes a description of the items contributed. Household items include furniture, furnishings, electronics, appliances and linens.

Additional Tips from the IRS

• Your donations are only deductible for the year they were made.  So remember, donations that were charged to a credit card before the end of 2013 count for 2013. This is true even if the credit card bill isn’t paid until 2014. Checks count for 2013 as long as they were mailed in 2013.

• It’s sad that this even has to be said, but always check to make sure that the non-profit organization is eligible. Non-profits with 501c3 status, many religious organizations such as churches and some government organizations, are the only ones that are tax-deductible. If you are unsure, you can check using this link from the IRS, Exempt Organization Select Check.

• If the amount of a taxpayer’s deduction for all non-cash contributions is over $500, a properly completed Form 8283 must be submitted with the tax return.

• Make sure to keep good records and receipts.

• For more information from the IRS, you can go to this link Charities and Nonprofits

While there is nothing fun about taxes, remember the joy that comes with giving. At least there is a silver lining for year-end giving….oh yeah and that deduction too!

Charity Matters.

 

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