TIPS FOR USING CHARITABLE CONTRIBUTIONS AND DONATIONS AS TAX DEDUCTIONS
Tax season always seems to sneak up on us at the end of the year and leaves us scrambling to get all of our receipts and tax information together. They are many different types of tax deductions that can be found however these deductions come with their own set of rules as well. This is also the same for charitable contributions and donations. This article will give you tips for using charitable contributions and donations as tax donations and maybe even give you some information about these deductions that can save you from extra work and trouble with the Internal Revenue Service later on down the road.
Itemize Your Tax Deductions
If you are completing and filing your tax return yourself or if you have a professional filing it for you it is important to note that in order to claim and deductions for charitable contributions and donations you will need to itemize. If you are filing as a standard deduction you will not be allowed to claim any of these contributions.
Tax Exempt Status
When you are making donations that you are going to want to claim as a tax deduction you will want to make your contribution or donation to a tax-exempt organization or charity. These organizations or charities will be able to tell you if they are tax exempt. If they do not know then they probably are not but you can ask them to find out for sure.
Keep Good Records
Throughout the year you should be keeping good if not perfect records of the amount of contributions you have made. In these records you should have bank statements, cancelled checks, credit card statements as well as any receipts from the charities and organizations you have made donations to. Without this proof you will be unable to claim the deduction and will be out of luck.
There Are Limits For Making Contributions
Often times people do not know that there are limits when you are making charitable contributions throughout the entire year. It is also important to know that if you receive any type of benefit back from the organization you have ultimately reduced the amount of that contribution by the value of what you have received.
Types Of Donations
Many taxpayers donate cash amounts throughout the year. If the total amount of cash you have donated exceeds the amount of $500 there is an additional form that you must attach with your return. This is Form 8283. The amount is much larger for non-cash donations. If you donation exceeds $5000 you will be required to have an appraisal of the property in writing before claiming it as a tax deduction.
The tax season and the filing of your tax returns can be a very confusing, time consuming and over whelming time period of each given year. If you have any questions regarding the rules and regulations of tax deductions involving charitable contributions and deductions you should speak with a tax professional or even the Internal Revenue Service. For more information you can visit prlog.org.