Since no good deed go unpunished, federal income tax rules for deducting charitable donations a complex personality. Here's what you need to know to discount your claim correct:
Basics of charitable deduction
Depending on the type of charity, and if you can contribute cash or other objects, you can write off your charities are likely to be limited to 20% or 30% or 50% of your adjusted gross income (AGI). AGI is your form 1040 number at the bottom of page 1. Includes all items of taxable income and chamfer set such alimony paid and moving expenses. Contributions that exceed the limit be applied can be posted for up to five years and hope that his opponent in the coming years.
Documentation required
You can only deduct the donations that you have the required documents. Following are details on the documentation rules.
Cash contributions under $ 250
To deduct a cash donation of $ 250 or less, and the best proof of your check or credit card statement is canceled. Preferably, we should also get a receipt from the Organization display name, date and place, due to the quantity. For small cash contributions, tell your church when you attend weekly services or to the Salvation Army around the holidays, keep a record to satisfy the IRS.
Noncash 250 contributions
To subtract the donation nonkash item worth less than $ 250, you need to deliver — such as the familiar sheets get donations for goodwill. It should show the receiving organization name, place and date of donation, and a description of what you donated. You may have to fill in most of this information yourself. You should also put a value on donated items. Finally, you should receive in hand by the time you file your return to claim your correct discount.
Cash donations of $ 250 or more
Cash discount gifts of $ 250 or more, canceled checks or other evidence provided by you is not good enough for the IRS. Instead you must collect from the charity qualifies contemporary written acknowledgment (more detailed than a simple delivery) meets IRS guidelines. You need to have this recognition in hand by the time you file your return in case you get audited. If you get audited, and you don't have, you lose the discount even though there may be a doubt for you to donate.
Contemporary meets the requirement flags if you can get it on or before the earlier of: (1) the date a file your form 1040 for the year you made or due date (2) (including any extensions) for filing the return. If you do not have a qualified recognition in hand with the history of magic, you won't be able to get credit for your charitable deduction.
Nonkash donations of $ 250 to $ 5,000
Nonkash item discount $ 250 worth of donated $ 5,000, you need confession contemporary qualified in addition to written evidence which supports the acquisition date for the item, fair market value, how much it cost, and so forth. You will need this information IRS form 8283 (see below). Keep the written confirmation and evidence (which may simply notice that you prepared yourself) with your tax records, but did not file them to return.
The main point: If your donations total nonkash for the year exceed $ 500, you must fill out form 8283 IRS (nonkash charitable contributions) and include it with your return.
More than $ 5000 nonkash giveaway
Deductible donation item valued at over $ 5000, generally you should collect confession contemporary form 8283 file qualified back and get qualified written appraisal of the item. Evaluation should be in hand by the time you file your return. Stricter assessment rules apply to donations of works of art worth $ 50000 or more. You can write a detailed evaluation fees for miscellaneous expenses that are subject to a 2% deduction threshold of Kona.
Main point: do not evaluate to donate publicly traded securities.
Donations of clothing and household items
Donated clothing and household items (like furniture, electronics and appliances), applying all the rules in previous documents. In addition, says the general rule for these elements you can only claim deductions for things in good condition or better. "However, you can deduct the fair market value of an item that is not in good condition or better if you attach a written qualification assessment values in the item at more than $ 500. For example, this rule applies to antique donated what fairly value despite being if not so great.
Donations of appreciated securities
When you contribute appreciated stock, please be sure to give away only those that you've owned for more than one year. This way you can deduct the full market value and avoid any capital gains tax permanently.
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