Giving cash donations or various items to charitable organizations can really make you feel good. It is nice to know you are able to help out those who are less fortunately then yourself. In addition to feeling good though you can generally use those donations as a tax write off. It is important to know that there are some limits when it comes to tax write offs and donations.
The Federal government will only allow you to count up to 50% of your adjusted gross income as a tax write off for donations. The donations also have to be given to a non-profit organization in order to qualify. This can be a Church, government agency, school, hospital, or fund raiser group that is for a worthy cause. The major charities including Red Cross and Salvation Army also fall into this category.
You should get into the habit of getting a receipt from the organization for any donations you make. The receipt should have a detailed description of the items being donated, the quality of them, and the number of them. It should also have an estimated dollar value on it. If you give a cash donation get a receipt as well. It is better to give a cash donation in the form of a check so you can keep that canceled check as a receipt.
There are various amounts you can claim as a tax write off if your donation is in the form of property. If it is valued at more than $5,000 you will need to provide information on how you acquired the property. A written appraisal must accompany a form that goes with your tax return ( Form 8283 – Non Cash Charitable Contributions).
In most instances you can write off the fair market value of any vehicle you donate to a non-profit charity organization. However you need to find out what the charity plans to do with the vehicle. If they are going to give it to the needy you are fine using the fair market value. However if they sell it to raise money for other expenses their organization has you can only claim the dollar amount they sold it for.
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