Tax Time Organizing Advice

Oh I just love this time of year, don't you? The crispness in the air, the lights, the food, the festive mood in the air, and all the gloriously fun end-of-year tax prep! Yeeeeeah, not so much on that last one. I just received my accountant's newsletter in the mail and there's some great stuff there about charitable giving as it relates to your taxes, that I thought you'd find useful. I know I did! Here you go...

1. Don't Give Cash. Try to remember to give to your favorite charities via check or credit card rather than cash, so you have a good record of the gift.

2. Don't Give Trash. Non-cash donations of household goods, clothing, and things like that now need to be in good or "better than good" condition in order to be deductible. Besides, you don't want to donate stuff that would insult the receiver anyway. Throw away anything you wouldn't be willing to give to someone you know personally. Also, each item needs to be documented and itemized. Gone are the days when you could get a receipt from Goodwill and list "one bag of ladies clothing: $200".

3. Check Qualifications. Be sure the organizations you're giving to are IRS qualified charities. If you're not sure, ask the charity.

4. Car Donations Count. Just be sure you know how the charity will use it. If they sell your car without fixing it up, you can only deduct the amount they receive for it. On the other hand, you may use "fair market value" of your vehicle if the charity uses the car to serve their purpose or substantially improves the car and then sells it.

5. Track Your Miles. You can deduct mileage for driving you do in connection with charitable or volunteer work. You can deduct one of two ways... either a straight 14 cents per mile plus tolls and parking (be sure to keep an accurate mileage log) or you can deduct actual expenses.

The bottom line? Keep on giving, just be sure you don't get yourself into IRS hot water at the same time.

Comments

[Terry Lessig]

Pertaining to #3, I'd worry that a charity might mislead if you ask them. Not necessarily intentionally, but consider that you might be asking a volunteer who doesn't really know for sure. Also, a charity might be registered in their home state, but not nationally. If unsure, check with your Secretary of State.

As for me, I'm qualified to accept cash donations.
Receipt? The absence of cash will serve as your receipt.