Federal Tax Law for Charitable Donations
Charitable donations are a benefit to both the giver and the receiving party. Items you no longer need or want can be used by others and you get a tax break for the donation. However, there are some IRS rules you must follow in order to claim that deduction on your income tax forms.
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Clothing and Household Goods
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Since 2006, the IRS made changes regarding the condition of your charitable contribution. The items must be in good (or better) condition in order to claim fair market value.
IRAs
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Money from an IRA can be donated to a charitable organization if you are 70½ or older. Even though the money taken from your regular IRA is taxable under normal circumstances, when donated it is not.
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Over $500
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If your charitable donations exceed $500, you must complete a form 8283. This form requires details regarding your contributions, including a description and fair market value of the items donated, and charitable donations over $5,000 require a professional appraisal.
Itemized Deductions
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Unless you are filing a 1040 form and a schedule A to itemize deductions, your charitable donations will not help you as tax deductions.
Qualified Organizations
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Your donations do not qualify as a tax deduction unless the charities are qualified under the IRS publication 78.
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