By Mark Randall
Each year, the IRS allows you to claim charitable donations as a reduction in your tax liability. If you are attempting to lower the amount you owe to the Internal Revenue Service (IRS), you might consider claiming a charitable donation. When you donate to a charitable cause, you not only help yourself in terms of the taxes you owe, but you also help contribute to your community and positively to society. There are several amazing charities to choose from. Here are some helpful things to know before attempting to claim such 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 you contribute cash in a value less than $250, make certain that you have a bank or credit card statement or copy of your cancelled check. For more than that amount, you will need written acknowledgement from the charity with the amount contributed clearly on the receipt or letter. Property donations require records with the charity’s address clearly labeled on them. If the fair market value for your property is more than $500, you will need a statement disclosing how you obtained the property. If more than $5,000 a qualified appraiser will need to write a statement for you.
If you have any questions about what precise documentation you need, consult your accountant or tax advisor. There is also information available from the IRS. Donating to a charity is a great way to help others. Look for a charity whose mission closely matches your own desire to help. There may also be special tax qualifications for donations made to schools or for charities that help the working poor.
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Topics: Taxes | Comments Off
MLA Style Citation:
Randall, Mark "Claim Charitable Donations For Tax Purposes." Claim Charitable Donations For Tax Purposes. 27 Jun. 2010. uberarticles.com. 12 Sep 2015 <http://uberarticles.com/finance/taxes/claim-charitable-donations-for-tax-purposes/>.
APA Style Citation:
Randall, M (2010, June 27). Claim Charitable Donations For Tax Purposes. Retrieved September 12, 2015, from http://uberarticles.com/finance/taxes/claim-charitable-donations-for-tax-purposes/
Chicago Style Citation:
Randall, Mark "Claim Charitable Donations For Tax Purposes" uberarticles.com. http://uberarticles.com/finance/taxes/claim-charitable-donations-for-tax-purposes/
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