Charity: Giving To
Tax Deduction For Charitable Donations
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Charitable donations are tax deductible to a maximum in any year of 50% of your adjusted gross income for donations of cash, and 30% for appreciated securities.
The law requires that every gift, no matter how small, must be supported by either a cancelled check or a receipt or letter from the charity. Donations over $250 require a letter or receipt from the charity.
Employer records are an acceptable way of proving donations made through payroll deductions.
For gifts of property:
- The deduction is for the value of the property at the time the gift is made (not the cost). Tax software programs generally have a listing of current values. You can also see valuations at the Salvation Army's website: www.salvationarmyusa.org/usn/www_usn.nsf/vw-dynamic-index/85256DDC007274DF80256B80003D22FC?Opendocument
- You need proof that is in "good used" condition. The IRS hasn't defined what that means. Photos are one way of proving the condition.
- You need a receipt for any donation worth at least $250, including a description of the property. For contributions over $500, an extra form (IRS form 8283) has to be included in your tax return describing the property. Property valued at more than $5,000 needs to be appraised.
With respect to used cars, as a general matter, the deduction is limited to what the charities sells the car for. You can deduct the fair market value if the charity gives or sells the car to a needy individual in "direct furtherance" of the charity's purpose.
NOTE: If you use your own car in service of charitable groups, you can consider 14 cents per mile to be a charitable contribution in 2018 plus what you pay for parking and tolls..
Reviewed by Jerry S. Chasen, Esq.
Chasen & Associates, P.A.
Miami, FL
To Learn More
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