Information about Chairatable Donations
taken from http://taxes.yahoo.com/tips/charity/
Please take a moment to look over how you can benefit from making a donation to our or other organizations.
Drive Away with a Tax Break
Instead of going through the hassle of selling your car, you can donate it and guarantee a cash advantage -- a tax deduction. When you donate a car to a charitable organization you can deduct the fair market value of the car. The IRS defines fair market value as the price at which the car would change hands between a willing buyer and seller if neither were forced to buy or sell. To ensure that the IRS doesn't question your deduction, you can clip a page of classified ads showing the prices of similar vehicles or include a photo illustrating the car's condition. For deductions of $500 or more, attach Form 8283, Noncash Charitable Contributions, to your tax return. The form allows you to describe the condition of the car and how you determined the value. For deductions of more than $5,000, you must attach a copy of an appraisal, made by a qualified professional, to your tax return. In addition, you must fill out the appraisal portion of Form 8283 and attach it to the return.
To take a charitable deduction, you must file Form 1040 and itemize deductions on Schedule A.
Be aware that the IRS is on the lookout for auto donation abuses. Any sign of excessive valuation of your car could bring a possible audit. If you take a deduction for more than the value of the car you donated, you could be hit with a penalty of up to 40 percent of the unpaid tax.
Excess Charity Can Follow You into Next Year
The maximum deductible contribution allowed is 50 percent of your adjusted gross income (AGI). If you gave more than 50 percent, the excess may be carried forward for up to five years. The 50-percent rule applies to most contributions, but it may be lower for contributions to certain organizations or for certain contributions of property.
Charitable Giving Helps for Non-Homeowners
Think you need to own a home to itemize and take advantage of your charitable contributions? Many people who contribute regularly to a charity such as a church may be able to itemize anyway. When charitable contributions are combined with items such as state and local income taxes and personal property taxes, the sum may exceed the standard deduction. Contact a tax advisor for complete information on what is deductible and how much you need to itemize.
Document Your Contributions
Many charitable organizations make extra efforts to collect money and goods during the last quarter of the year. Be sure to keep records of the money you contribute to UNICEF or other similar charities at Halloween and the canned goods and other non-perishables you put in collection bins for organizations that help the needy. Your last-minute contributions can add up to a nice deduction if you itemize. Remember, if you contribute $250 or more at one time to a charity, the organization receiving the donation must provide you with written documentation of the donation. A cancelled check is not sufficient proof.
Charitable Deductions Begin at Home
Make sure your generosity during the coming year pays off as much as possible by rounding up all of your write-offs. The big contributions which translate to the big deductions are hard to overlook - what you give your church or synagogue or alma mater. But little expenses from your good-deed-doing can also mount up. Whether it's out-of-pocket contributions to a bell-ringer or what you pay for supplies while you're doing charitable work, if the money is going to help a qualified charitable organization, you get a deduction. If you drive your own car while doing volunteer work, you can deduct 14 cents a mile. If your charitable work takes you out of town overnight as the official delegate to a church meeting, for example, you can deduct the cost of transportation and the cost of your meals and lodging.
Smart Gifts Make Great Write-Offs
There's a special break if you donate property such as stock or mutual fund shares to charity. If you owned the asset for more than a year, you get to write off its value on the day that you made the gift, not what you originally paid for it. You don't have to pay tax on the appreciation while you owned the stock, either. Take advantage of this break now if you donated appreciated property last year and keep it in mind in the future. Whenever you make substantial contributions, consider using appreciated property instead of cash. What if you really want to keep the stock in your portfolio? Donate the shares you own and use the cash you would have given to buy shares on the open market. The advantage is that you'll owe tax only on profit that accrues after you repurchase the shares. If the stock or mutual fund shares you plan to donate have decreased in value, sell the shares and donate the cash. That way, you can deduct your loss and claim a charitable deduction as well.
Count Before You Cast
Tis the season of giving. But it's still okay to count before you contribute. So, before you cast coins into a kettle, jot a note with the date and amount given. You may deduct that amount as a contribution if you itemize deductions on your tax return. Keep track of other charitable giving, too. If you purchase and donate food items or new gifts such as clothing or toys, you may deduct the expense. If you donate used items, those contributions are tax deductible, too, based on the donated items' resale value. (That's the amount you could get for that blanket or coat if you were to have a garage sale, or what you'd spend on it at a thrift store.)
The Difference is Deductible
Suppose you buy a Christmas tree from a non-profit organization such as a church. If you pay $80 for a 5-foot pine, and 5-foot pines are going for $50 all over town, the $30 difference is deductible. It's considered your donation to the church. The same goes for a Hanukkah menorah or Kwanzaa candles. Anytime your purchase from a not-for-profit organization includes a donation, ask the selling organization for a statement that says how much of your purchase price is a charitable contribution. If you are using the breast cancer awareness postage stamp to mail your holiday greetings then you know the stamps cost more than the usual 37 cents. The Postal Service is directing proceeds from the sale of the stamp to medical health and research organizations. So for every card you send, that's a donation of the difference between what you actually paid for the stamp and 37 cents to charity. Keep track of your total charitable donation and you may deduct it.
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