Here are eight things you should know about deducting your gifts to charity:
- If you want to deduct your gift, you need to donate to a qualified charity. You can’t deduct gift’s to individuals, political organizations or candidates.
- In order for you to deduct your contributions, you must file Form 1040 and Schedule A itemized deductions with your federal tax return.
- If you get a benefit in return for your contribution, your deduction is limited. You can only deduct the amount of your gift that’s more than the value of what you got in return.
- If you give property instead of cash, the deduction is usually that item’s fair market value. Fair market value is generally the price you would get if you sold the property on the open market.
- Used clothing and household items must generally be in good condition to be deductible. Special rules apply to vehicle donations.
- You must file a form 8283 for noncash charitable contribution for all noncash gifts are more than $5000 for the year.
- You must keep records to prove the amount of the contributions you make during the year. The kind of records depends on the amount and type of your donations. For cash is needed to have a written record with name of the charity, the date and the amount donated. A cell phone bill meets this requirement for text donations if it shows this same information.
- To claim a deduction for donated cash or property of $250 or more, you must have a written statement from the organization. It must show the amount of the donation and a description of any property given. It must also say whether the organization provided any goods or services in exchange for the gift.