How to Take Tax Deductions for Charitable Giving

It's not always easy claiming charitable deductions. It's wise to know the rules. For example, cash and noncash contributions require different forms of verification and documentation, depending on the type and amount of the contribution and the organization involved.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Checkbook Wallets
• File Cabinets
• Accountants
• Credit Cards And Loans
• Tax Consultants
• Personal Financial Software

1. Review your records, noting the method of donation (cash, property, securities, etc.), amount of contribution, organization contributed to, and other information for each charitable contribution you made during the year.

2. Itemize your charitable contributions on Schedule A of Form 1040.

3. Enter the amount of your total cash donations (including check and credit card donations) for the year on line 15.

4. Enter the amount of your total noncash contributions on line 16. (If the amount of your noncash deduction is more than $500, you must complete and attach Form 8283.)

5. Enter the amount of any carry-over deductions (from previous years) on line 17.

6. Enter the total of lines 15 through 17 on line 18 for your total Gifts to Charity deduction.

7. Make sure to claim your deductions in the same year that you made the contributions.

Tips & Warnings

• Review Internal Revenue Service Publication 526, "Charitable Contributions," for more detailed guidelines.
• If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution.
• Consult with an accountant or tax adviser.
• If you use a short form or take standard deductions when filing, you cannot claim charitable contributions as deductions.
• Your deductions for charitable contributions is generally limited to 50 percent of your adjusted gross income, but in some cases 20 percent and 30 percent limits may apply.
• Claiming expenses incurred from having a student living with you requires a statement from the sponsoring organization, a summary of expenses and the dates of the student's attendance at school.
• If you donated a noncash gift valued at more than $5,000, you may also have to get appraisals of the donated property.

[DavidAnderson]

on 12/19/2008 If you only donate a few items, then the free valuation guides at goodwill will provide good information on your donations. If you donate many items each year, then donation valuation software will pay for itself. If you use Turbotax to do your own taxes, then use their Itsdeductible software to find values for your donations. If you use an accountant or taxpro, then I would recommend www.charitydeductions.com since they provide the same eBay completed auction valuations as itsdeductible, but don't require you to purchase Turbotax. Using this type of software will help you to increase your charitable deductions and reduce your tax bill.

[jpnlaura]

on 12/8/2008 I have donated the use of my R.V. to a non-profit animal rescue to go to exhibition sites to earn money for the organization. I incure approximately $200 in expenses (fuel, hauling, supplies for the R.V.) not to mention, if the crew had to rent a hotel room or R.V. ot would be in excess of $2,000. How do I deduct that from my taxes?

on 11/22/2005 I usually donate a lot of clothing etc. to Goodwill each year. I found that by using software of the fair market values for these items I was able to boost my itemized deductions from around $300 to $1300. The only available resources I know of is web-based valuation site: www.charitydeductions.com, or if you use the TurboTax or TaxCut software they have complementary programs that calculate the values of clothing etc. They all cost around $15 but usually save you around $300 in taxes if you itemize.