November 10, 2017
If visions of making the world—or at least your community—a better place dance through your head, then charitable giving is probably on your holiday to-do list. While it may or may not be your primary motivation for giving, if you make monetary gifts to 501(c)(3) organizations, you can get a tax deduction for them. As a rule, charitable donations to these types of organizations are deductible to the extent the value you give exceeds the value you receive. For example, if you make a $100 donation to a charity and receive a ticket for a $25 dinner in return, your total tax deduction would be $75.
Tax Deductions of Non-Cash Items
If your church or a local charity solicits gently used items to help support individuals in need, you can
deduct the value of the contributions you make on your tax return. Donations of clothing, vehicles and
furniture are all tax deductible. Keep in mind that to write-off over $500 in items, you must include
IRS Form 8283 "Noncash Charitable Contributions" with your tax return. If an item is worth $250 or
more, you must get a receipt or similar documentation that shows the value of the item. If an item is
worth $500 or more, you must have an IRS-approved appraiser come out to appraise the item. Another
point to consider: The IRS has become increasingly alert about vehicle donations and donors taking
large deductions for them. Be sure to be realistic about the amount of money the vehicle you are
donating is worth.
Tax deductions for services
You can also deduct expenses related to volunteer work at a charitable organization if the expenses
were directly connected with the services provided and you were not reimbursed for them. Some
examples of legitimate deductions include travel expenses, the cost of materials purchased for an
event or the cost of a uniform that is mandated to be worn when performing your volunteer duties.
The value of your time or the services provided cannot be deducted.
Keep track of your good deeds for tax purposes To ensure that you receive the tax benefits of your
giving spirit, make sure to keep up-to-date records of the gifts you make. For example, if you give cash
to a charity, make sure to keep a bank statement, cancelled check or credit-card receipt showing the
amount of the donation. For gifts of cash or property worth more than $250, you should also keep a
written acknowledgement from the charity showing the date and value of the donation. When donating
physical items, it is a good idea to take a picture of them to prove they are in good condition, especially
if any items you donate are worth over $500. The holidays are the perfect time to do good deeds
and help others with gifts of money, goods or your time. When you do, use the tips above to report
them appropriately to the IRS.