Tips for Taxpayers Making Charitable Donations

Wednesday, December 8, 2010, 4:45 AM | Leave Comment

Americans like to donate to their selected charities. For the most part, they are givers instead of receivers. For this reason, I guess IRS has deductions for folks who donate to charitable organization to make it easier for individuals as well as organizations. If you made a donation or going to make one in the next few weeks before December 31, you may be able to take a deduction for it on your 2010 tax return.

Here are the important facts the IRS wants you to know before deducting charitable donations.

  • Qualified Charity

    To be eligible for deductions on your tax return, your donations to charities must be made to organizations that are registered with and approved by IRS. You could check with the charity itself whether it is a qualified organization. You can also check IRS Publication 78 for Cumulative List of Organizations, which lists most qualified organizations.

  • Only When You Itemize

    Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.

  • Keep Records

    Be sure to keep good records of any contribution you make, regardless of the amount.

  • Deduct Contributions For Tax Return Year

    Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September but paid the charity only $200 by Dec. 31, your deduction would be $200.

  • Contribution Date

    Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.

  • Written Acknowledgment

    For any contribution of $250 or more, you must have written acknowledgment from the organization to substantiate your donation.

  • More than $500

    To deduct charitable contributions of items valued at $500 or more you must complete a Form 8283, Non-cash Charitable Contributions, and attached the form to your return.

  • More than $5,000

    An appraisal generally must be obtained if you claim a deduction for a contribution of non-cash property worth more than $5,000. In that case, you must also fill out Section B of Form 8283 and attach the form to your return.

In a Nutshell
TaxACT Free Federal and Deluxe Editions include both Schedule A and all the necessary forms you need. You can also use any of these tax software to help you do your taxes.

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