Are you cheating yourself out of valuable deductible charitable contributions? Maybe you are underestimating the value of items you give away, or not hanging onto those receipts.
Even some mileage to and from charitable events may be deductible.
Here are a few things to keep in mind for declaring charitable deductions:
Keep better records: The charitable contribution will be disallowed for any monetary contributions unless the donor maintains a record of the contribution. This now applies to any contribution of money, regardless of the amount. Be sure that you have bank records, cancelled checks or written acknowledgements for all cash contributions that show the name of the charitable organization, the date and the amount of the contribution. For monetary donations or items over $250 in a single donation, the IRS requires an additional written acknowledgement from the organization. Taxpayers claiming over $500 for all contributed property must complete and file Form 8283, Noncash Charitable Contributions.
Hold onto your pledge cards: Taxpayers who have had charitable contributions deducted from their paychecks are required to hold onto their pledge cards from the charity, pay stubs, and their Form W-2 or other employer information that states the total amount of donation. Be sure that you have bank records, cancelled checks or written acknowledgements for all cash contributions that show the name of the charitable organization, the date and the amount of the contribution.
How to figure out what donated items are worth: When declaring the value of donated clothing or items for tax purposes, determine the fair market value. This can be the price the item might sell for at a garage sale or thrift store. IRS Publication 561 Determining the Value of Donated Property is a good source to use.
Be sure the charity is recognized as legitimate by the IRS: Check that your donations are made to a charity or non-profit organization that the IRS considers legitimate. Approved non-profits include those whose focus is religious, charitable, educational, literacy, preventing cruelty to children and animals, or serving military veterans. IRS Publication 78 lists all approved organizations. You cannot deduct the value of your time, but if you’re a volunteer, you can deduct your out-of-pocket expenses and volunteer mileage.
Charitable mileage: Charitable mileage is deductible at 14 cents per mile. If you volunteer for a charitable or non-profit organization, your mileage is deductible to and from meetings and functions.