Thursday, December 10, 2009

0 'Tis the Season to Give!

It's the Holiday Season, which gets us in the giving spirit!  Since my fam has been doing some things to "Give Back" this year, I thought it would be a great opportunity to give some simple Tips and Tricks about Charitable Contributions.

In order to deduct your Charitable Contributions at tax time, here are some things to remember:
  • Itemize all items donated - Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A)
  • Donate to a legitimate charity - Contributions must be made to qualified organizations to be deductible. You cannot deduct contributions made to specific individuals, political organizations and candidates.  The IRS offers an online search page to determine if the organization you are contributing to qualifies for deduction.
  •  You must have a receipt from the charity - Regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution.

I also like to make sure that I snag a pic of the item(s) I am donating/contributing.  Whether you are donating to a consignment shop, a local food pantry, Toys for Tots, etc... it is a good idea to take a photo of the donation to keep with your tax records.  This is to provide additional proof in case of a future audit.  Just me being extra cautious.

I also make sure to mark the receipts used to purchase items for a charity, singling out the items donated and toss that in my tax box as well!  (I use this Paper Box I picked up at Ikea, its perfect for storing Tax Papers!)  That way, when it comes time to file, I have it all in one spot and there is no scrambling to remember what all was contributed throughout the year.

It is also important to keep documentation of any charitable contributions you have automatically withheld from your paycheck through your employer.

Then just grab a manila folder and toss everything in there, so when that special tax day comes around, you are all set!

Please know that I am not a licensed tax professional, just your average Josephine trying to stay organized for MY licensed tax professional!  For additional information on rules and regulations regarding Charitable Contributions, please visit the IRS website or contact your local tax adviser.

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