Tips for Charitable Taxpayers
If you are among the many taxpayers that made a donation to a charity this year, then you may be eligible for a deduction for it on your 2011 tax return. The Internal Revenue Service has provided information for taxpayers about deducting charitable donations.
To deduct a charitable donation, the donation must be made to an organization that qualifies. You can check the IRS Publication 78, Cumulative List of Organizations, or simply as the organization if they are a qualified organization. Your charitable contributions may only be deducted if you itemize deductions using Form 1040, Schedule A. you can deduct cash contributions and the fair market value of more property that you donate.
If you received something in return, you are allowed to only deduct the amount that is over the fair market value of the benefit you received. It is very important to keep good records of any and all contributions. Only contributions paid during the taxable year are deductible. If you make a contribution for more than $250, then you need to have a bank record, a written acknowledgement from the organization you contributed to, and must include the cash amount. If you donated items that are over $500, then you must complete a Form 8283, Noncash Charitable Contributions, and include the form with your return. If you donated items worth more than $5,000, then you must have the items appraised and then complete Section B of Form 8283 and include it with your tax return.
Make sure to determine if the organization you donated to is one of the 275,000 organizations that lost their tax-exempt status because they did not file their annual reports for three consecutive years. Check www.IRS.gov to view the list of organizations.
For more information, please contact Wood, Atter & Wolf, P.A., in Jacksonville and Ponte Vedra Beach, Florida.
