Get the most for your donations this tax season – via Shutterstock
When it comes to tax deductible donations, there are several charitable contributions that qualify to help lower your tax bill. Here are some tips to make sure your contributions give you the most payoff on your return.
Tips on tax deductions for donations
1. Make sure you are giving to a qualified organization, like these five national charities for donation pick up. Contributions made to specific individuals, political organizations or candidates cannot be deducted. See IRS Publication 526, Charitable Contributions, for rules on what counts as a qualified organization.
2. Donations of stock, land, art or other non-cash property are usually valued at the fair market value (price a willing buyer would purchase it for) of the property. Clothing, household items and electronics must be in good or great used condition to be deductible. Special rules apply to vehicle donations. Check out Bargain Babe’s post on how to determine tax deduction value of donated items for more information. If your total for all noncash contributions is over $500, you must complete attach IRS Form 8283, Noncash Charitable Contributions, to your return.
3. If you receive a good in exchange for your donation such as a vacation, tickets to a show or other services, you can deduct only the amount that exceeds the fair market value of the good received.
4. To deduct a cash, check or other monetary donation, you must be able to provide a bank record, payroll deduction record or other documentation from the organization. If the donation is $250 or more, the documentation must have a description of the contribution and if you received any goods in return.
5. If you are donating a single item or a group of similar items valued at more than $5,000, you must submit an appraisal by a qualified appraiser.
6. To deduct any charitable contribution of any amount, you must file Form 1040 and itemize deductions on Schedule A. Your tax preparer or online service will have these available for you.
What unique tax deductible donations did you make this year?
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price.
One thing to keep in mind when making a contribution is that you can only take the deduction if you itemize your deductions (Schedule A) on your income tax returns.
Most non-cash donations are valued at the LESSER of your cost or fair market value according to the IRS.
While contributions to a church are a love offering, write a check or get a receipt for cash contributions to back up your claim in case of an IRS audit.
Myke Sobel, RTRP
Thanks for the tips, @Myke!
@Myke Good tip! Most of the time, all your deductions won’t add up to more than the standard deduction. SO make sure you really have LOT of deductions before you spend all the time itemizing.