Give and receive this holiday season:
Charitable donations reap tax rewards
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[December 11, 2013]
CHICAGO — Donations to
not-for-profit organizations are usually ramped up during the
holiday season, and if you plan to spread charity and generosity,
remember that your good deed can be rewarded when you get the
benefit of your contribution as a deduction on your tax return.
The Illinois CPA Society recommends following these steps to be sure
you maximize your generosity while complying with IRS requirements:
All monetary contributions, regardless of the amount, must be
documented with a receipt and a bank record such as a canceled
check. Written acknowledgement is needed if the donation is $250
or more. You'll also need receipts for donated gifts, such as
clothing or appliances, and for any expenses.
Consider using a
credit card so you'll always have an automatic receipt.
Checks are also better than cash since they provide accepted
proof of a donation.
Check if the
charity is qualified by the IRS. Contributions of any kind
are not deductible unless the donation is made to a qualified
charity. To find out if the charity is qualified, check the IRS
[to top of second column]
You may deduct only the fair market
value of donated goods like old clothing. Market value is
the amount a potential buyer will pay a willing seller.
Market value is not the purchase price, but more like the
amount someone would pay at a thrift store.
Be honest on
the value of items.
must be made before the end of the year in order to get a
2013 tax deduction. Contributions by check are considered by
the date they are mailed, not the date they are written or
when the check clears.
Watch your timing.
Keep in mind that donations must also be of "meaningful use" to a
charity. These rules generally apply to household items such as
furniture, appliances and electronics, but not to art, gems or
antiques. Vehicles have their own set of rules, which can also be
found on the IRS website.
When in doubt, consult with a CPA. If you need a CPA, use the "Find
a CPA" directory on the Illinois CPA Society website,
www.icpas.org, where more
information is also available.
[Text from file received from
Illinois CPA Society]
The Illinois CPA Society, founded in
1903, is the fourth-largest state CPA group in the nation, with more
than 23,000 members. It is the premier professional organization
that represents CPAs in Illinois. For more than a century, the
society has advanced the highest ethical and financial standards of
the profession and remains a leader in educating the public on