Generosity is a wonderful quality to have. There are many benefits to being a generous person: warm friendship, satisfaction…and tax deductions. While there are no rules in regards to being a generous person, we do have some tips that will allow you to properly deduct your generosity:
1. Charity Charities must qualify under IRS guidelines in order to be able to deduct your gifts. The IRS has a free tool you can use to look up your charity to check that it qualifies. Churches, synagogues, temples, mosques and government agencies qualify whether or not they appear in the data base.
2. Monetary Gifts Keep good records. In order for your gift to qualify you must have a bank record (cancelled check, bank statement, etc.) or a written statement from the charity.
3. Household Items Household items that you would like to donate must be in good use condition in order to be able to claim them on your taxes. A deduction claimed over $500 does not have to meet this standard if you include a qualified appraisal of the item with your tax return. Again, you must have proper documentation from your charity in order to deduct.
4. Gifts By Credit Card You may deduct contributions in the year you make them. For example, if you donate by credit card in December 2015 but do not pay your bill until January 2016, you may still claim your deduction in the 2015 tax year.
Enjoy the many benefits of being a generous person!
