Not only can making a donation to those in need feel great, it can also benefit you at tax time. Depending on a few requirements, you may be able to deduct your charitable gift from your taxes. If you’ve made a contribution, consider the following tips to see if you are eligible to claim a deduction.
- Charities must be qualified by the IRS in order to deduct your gifts. Donations to individuals, political associations, and candidates are not eligible for deduction.
- You must itemize your deductions in order to claim a charitable contribution, by filing a Schedule A, Itemized Deductions with your Form 1040.
- Your deduction amount may be limited if you received a benefit in return for your donation. For example, meals, event tickets, and other goods received are considered benefits and you are only able to deduct the value of your deduction above the value of the benefit.
- Donated property is deducted based on the fair market value of the item. This means your deduction is usually what you can get if you sold the item instead of donated it.
- Any used clothing or household goods have to be in good condition in order to be deducted. There are special rules for cars, boats, other vehicles, and some different types of property donations.
- If you are deducting more than $500 in noncash gifts, you will have to file Form 8283, Noncash Charitable Contributions.
- It’s important to keep all records to document the amount of the contributions you make. This proof can vary with each donation, so maintain all receipts and records of donation. For cash donations, you need a written record to substantiate your donation.
- If you donate more than $250 in goods or cash to an organization, you will need a written statement provided by the charity. This statement should show the amount of the donation as well as a description of the items donated. It is also necessary to list any benefits received in exchange for donation.