Firstly, the IRS describes provisions outlining rules for donating clothing and household items, and guidelines for monetary donations. To help taxpayers plan their holiday-season and year-end giving, the IRS offers the following useful reminders:
- Contributions are deductible in the year made.
- Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. The searchable online listing of qualified organizations can be found at IRS.gov under Search for Charities.
- For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions.
- For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property.
- The deduction for a motor vehicle, boat or airplane donated to charity is usually limited to the gross proceeds from its sale.
- 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.
Secondly, the IRS details provisions regarding how IRA owners, age 70 ½ or over, may contribute up to $100,000 per year to an eligible charitable organization tax-free. See IRS Publication 590, Individual Retirement Arrangements (IRAs), for more information on qualified charitable distributions at: http://www.irs.gov/pub/irs-pdf/p590.pdf.
Another useful resource is the online mini-course, "Can I Deduct My Charitable Contribution?" (a 20-minute presentation) found at: http://www.stayexempt.org/mini-courses/canIDeduc/player.html
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Labels: charitable contribution, charitable distribution, charitable donation, IRA, IRS, nonprofit, tax deductible donation, tax exempt organization
