The IRS has published its Ten Tips for Taxpayers making Charitable Donations in 2009.
Valerie Rumbough1) Charitable contributions must be made to qualified organizations to be deductible.
2) Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.
3) You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to some donations, so be sure to know the facts.
4) If your contribution entitles you to receive merchandise, goods, or services in return, you can deduct only the amount that exceeds the fair market value of the benefit received.
5) Be sure to keep good records of any contribution you make, regardless of the amount. For any contribution made in cash, you must have a qualified record of the contribution.
6) Only contributions actually made during the tax year are deductible.
7) Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.
8) For any contribution of $250 or more, you must have written acknowledgement from the organization to substantiate your donation.
9) To deduct non-cash charitable contributions valued at $500 or more, you must complete a Form 8283 and file with your return.
10) To deduct non-cash items valued at $5,000 or more, you must obtain a qualified appraisal also. For more information on these tips, visit the IRS Web site, www.irs.gov.
Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at (800) 723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.