Tax tips for holiday charitable giving

The spirit of giving seems to grow during the holiday season, and many donations are made to charitable causes at this special time of year. According to the IRS, taxpayers will need to keep some important points in mind when making donations with the expectation of deducting them on a federal tax return. You can deduct donations only if they make them to a qualified tax exempt organization. Which ones are exempt? “Taxpayers can search for many charitable organizations online at IRS.gov with Publication 78,” said IRS spokesperson Gregg Semanick. “Qualified organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals. Generally, organizations will be able to tell you whether they are tax exempt under the Internal Revenue Code and eligible to accept tax-deductible donations.” Semanick added that it is necessary to file Form 1040 and itemize deductions on Schedule A to receive a charitable contribution deduction. Be sure to keep good records, too. Keep records if you want to donate money To deduct any charitable donation of money, a taxpayer must have a bank record, credit card statement or a written communication from the charity showing the name of the charity and the date and amount of the contribution. A bank record includes canceled checks, bank or credit union statements. Bank or credit union statements should show the name of the charity and the date and amount donated. Credit card statements should show the name of the charity, the transaction posting date and the amount donated. Prior law allowed taxpayers to support their donations of money with personal bank registers, diaries or notes made around the time of the donation. Those types of records are no longer sufficient. Get receipts for property donations For all donations of property, including clothing and household items, obtain from the charity, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value. To deduct charitable contributions of items valued at $250 or more you must have a written acknowledgment from the qualified organization. To deduct charitable contributions of items valued at $500 or more you must also complete a Form 8283, Noncash Charitable Contributions, and attach the form to your tax return. You may need an appraisal To be deductible, clothing and household items donated to charity must be in good used condition or better. A clothing or household item for which a taxpayer claims a deduction of over $500 does not have to be in good used condition or better if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances, and linens. More information about charitable donations can be found in IRS Publication 526, available online at IRS.gov .