MARQUETTE - The Internal Revenue Service is offering several tips to help taxpayers plan their holiday season and yearend giving to charity.
The reminders include:
- Contributions are deductible in the year made. Donations charged to a credit card before the end of the year count for 2011. This is true even if the credit card bill isn't paid until 2012. Checks also count for 2011 as long as they are mailed in 2011.
- Check to be sure the organization is qualified. Only donations to qualified organizations are tax-deductible. Internal Revenue Publication 78, searchable and available online at www.irs.gov under "search for charities" lists most organizations that are qualified to receive deductible contributions. In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even if they are not listed in Publication 78.
- For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes et cetera) exceed the stand deduction. Use the 2011 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.
- For all donations of property, including clothing and household items, get from the charity, if possible, 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. Additional rules apply for a contribution of $250 or more.
- The deduction for a motor vehicle, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C, or a similar statement, must be provided to the donor by the organization and attached to the donor's tax return.
- If the amount of a taxpayer's deduction for all non-cash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.
- Finally, as always, the IRS reminds taxpayers is is important to keep good records and receipts.
For more information on charitable giving, including tax information for charities and non-profits, visit www.irs.gov.