6 Tips for 2014 Gift Deductions (Direct from the IRS)
Many people give to a variety of charities each year. If you are one of those people and would like to claim a tax deduction for your gifts, there are several tax rules that you should know about before taking that tax deduction.
6 tips from the IRS that you should keep in mind
You can only deduct gifts you give to qualified charities. Use the IRS' Select Check tool to see if your group qualifies. Remember that you can deduct donations you give to churches, synagogues, temples, mosques and government agencies. This is true even if Select Check does not list them in its database. Click here to access the IRS' select check tool.
Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction(s). You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return. This is true regardless of the amount of the gift. The statement must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank, credit union and credit card statements. If you give by payroll deductions, you should retain a pay stub, a Form W-2 wage statement or other document from your employer. It must show the total amount withheld for charity, along with the pledge card showing the name of the charity. Click here to read more about the IRS' written record of charitable contribution.
Household items include furniture, furnishings, electronics, appliances and linens. If you donate clothing and household items to charity, they generally must be in at least good used condition to claim a tax deduction. If you claim a deduction of more than $500 for an item, it doesn't have to meet this standard if you include a qualified appraisal of the item with your tax return.
You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements. Click here to read more about the IRS' acknowledgment from a charity.
You can deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2014. This is true even if you don't pay the credit card bill until 2015. Also, a check will count for 2014 as long as you mail it in 2014.
Special rules apply if you give a car, boat or airplane to charity. For more information visit IRS.gov.
Click here to read the IRS' special rule for vehicles.
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Cindy McSwain leads AGH’s outsourcing services group. Her team provides payroll, accounting, funds disbursement, controller, and other financial outsourcing services to numerous clients throughout the U.S. Prior to directing the outsourcing group, Cindy served AGH’s audit clients for 10 years, working with a wide range of middle-market, closely held and family-owned clients.
Her current clients cross many industry sectors, including manufacturing, distribution, restaurants, retailers, medical, and not-for-profit. She has participated in numerous SEC filings and public registrations and has experience in mergers and acquisitions. Cindy is a certified public accountant and a member of both the American Institute of Certified Public Accountants and the Kansas Society of Certified Public Accountants.
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