6 Tax Tips to Get the Most from Your Charitable Contributions

Tax day is quickly approaching. As you are gathering all your information to file your taxes, don’t forget about the gifts you have made over the past year to your favorite charity. Charitable contributions made to qualified organizations can help to lower your tax bill.

Here are a few quick tips to help make sure you get the maximum benefit from your contributions on your tax return:

1. In order to get a legitimate tax deduction your gift must be made to a qualified organization. If you are unsure if the organization qualifies, then take a look at IRS Publication 526 for what the rules are on what constitutes a qualified organization.

2. You have to file Form 1040and itemize your gifts on Schedule A if you want to deduct a charitable contribution.

3. Gifts given to charitable organizations over the course of the year like sporting event tickets, merchandise or other goods and services the tax-deductible amount is the amount that exceeds the fair market value of the benefit that was received.

4. When you make a donation of stock or other non-cash property – they are valued at what the fair market**value would be at the tie of the gift. If you donate clothing or household goods – they must be in very good condition to be deductible. If your total deduction for all non-cash contributions for the year is over $500, you have to complete and attach IRS Form 8283, Non-cash Charitable Contributions, to your return as well.

5. If you are donating an item that is valued at more than $5,000 you must also complete Section B of Form 8283, which requires that the item or items be appraised by a qualified appraiser.

6. In order to be able to deduct a contribution made of cash, check or other monetary gifts (like a wire transfer), 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 the 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.
** 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. For information on determining value, you can look at Publication 561, Determining the Value of Donated Property. All the forms and publications mentioned here are available at http://www.irs.gov.
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Judi Steadman is the Director of Individual & Planned Giving for Susan G. Komen San Diego, the County’s largest funder of free breast cancer services and support and is the only organization providing qualified women the free services they need for every step of the breast cancer journey. Learn more at komensandiego.org.