TIPS FOR YEAR-END GIVING

With the year about to come to an end, taxpayers may want to make charitable contributions, including clothing and household items, to good causes, and take deductions on their tax returns in the process.  It is helpful to keep in mind IRS requirement in making these contributions, to avoid audit problems along the way.

To deduct clothing and household items, they generally must be in good used condition or better. If you think the item is worth more than $500, you should get an appraisal and keep records.

To deduct money donations, you must have a bank record or a written receipt from the recipient charity. Acceptable records also include canceled checks, bank or credit union statements, and credit card statements, which must include the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

Additional Reminders

To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following additional reminders:

  • If you donate $250 or more in cash, you of course must keep records of the donations.
  • Contributions are deductible in the year made. Check donations are good for 2012 as long as they’re made before December 31.
  • Make sure recipient is an exempt organization.  Your New York Tax Attorney can help you verify if an entity is exempt.
  • Of course, donations to churches, synagogues, temples, mosques and government agencies are deductible.
  • You benefit from charitable donations only if you file tax returns using Form 1040 Schedule A, not short (Form 1040A or 1040EZ)..
  • If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.
  • And, as always, it’s important to keep good records and receipts.

For further information or questions, contact your tax professionals. Thorgood Law Firm www.thorgoodlaw.com 212-490-0704 is comprised of tax attorneys and CPAs who have decades of experience representing clients on tax matters before the IRS and state taxing authorities.

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