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'Tis Deductible to Give
The holidays are here, and giving is on all our minds. Santas with bells collect for the Salvation Army. Retailers have gifts for your friends and family. Food kitchens ask for your time in helping the needy. By giving, others receive. But by giving, can you also receive something yourself come tax time?
How can charitable contributions benefit your taxes? First, cash and noncash contributions to qualified §501 (c)(3)organizations are itemizable on your 1040. So, if you typically claim the standard deduction, you won't get any (tax) benefit here. Second, be sure to get a receipt for your records. This doesn't have to be turned in, but you'll want it if the IRS has any questions.
Noncash receipts can require a bit more paperwork. If you're donating old clothing and various household items, make an itemized list of what you're giving, and get a receipt from the charity. Also, items must be of fair quality. You can't get a deduction for donating junk. Donated stock needs the purchase price, date and number of shares. A car, motorcycle or boat has to have a completed form from the donee, indicating the price at which it was sold.
What about time spent volunteering? The hours you put in are not deductible. However, any miles in service of a charitable cause can be deducted. So track your mileage to add to your deduction.
So this holiday season, give give give, and you will receive receive receive deductions in tax season.
Unfortunately, it is impossible to give comprehensive tax and accounting advice over the internet, no matter how well researched or written. Before relying on any information provided here, contact a tax or accounting professional to discuss your particular situation.
