Tips for Charitable Contribution Deductions
Charitable contributions are tax deductible, and contributions must be made to qualified organizations in order to count as deductions. Qualified organizations are listed by the IRS and if there is a question on whether or not an organization is qualified, the IRS can be contacted to help you determine that.
There are several rules on charitable donations that determine whether they are deductible or not as well as the amount of the donation that is deductible. For instance, many may not be aware that property donations are deductible based upon the fair market value of the property donated. There are special rules applied to certain items like cars or clothing.
It is also important for you to keep records of everything that you donate, and also have records from the organization in which a donation was made. A recent IRS newsletter goes into more detail about charitable donations and how they should be dealt with:
Ten Tips for Taxpayers Making Charitable Donations
Did you make a donation to a charity this year? If so, you may be able to take a deduction for it on your 2010 tax return. However, with charitable contributions there are several rules that determine whether contributions qualify or not along with the qualified amount. The IRS can help you to determine if your contributions are eligible for deductions.
Here are the top 10 things the IRS wants every taxpayer to know before deducting charitable donations:
1. Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. You can also check IRS Publication 78, Cumulative List of Organizations, which lists most qualified organizations. IRS Publication 78 is available at IRS.gov.
2. Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.
3. You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.
4. If your contribution entitles you to receive merchandise, goods, or services in return – such as admission to a charity banquet or sporting event – you can deduct only the amount that exceeds the fair market value of the benefit received.
5. Be sure to keep good records of any contribution you make, regardless of the amount. For any contribution made in cash, you must maintain a record of the contribution such as a bank record – including a canceled check or a bank or credit card statement – a written record from the charity containing the date and amount of the contribution and the name of the organization, or a payroll deduction record.
6. Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September but paid the charity only $200 by Dec. 31, your deduction would be $200.
7. Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.
8. For any contribution of $250 or more, you must have written acknowledgment from the organization to substantiate your donation. This written proof must include the amount of cash and a description and good faith estimate of value of any property you contributed, and whether the organization provided any goods or services in exchange for the gift.
9. To deduct charitable contributions of items valued at $500 or more you must complete a Form 8283, Noncash Charitable Contributions, and attached the form to your return.
10. An appraisal generally must be obtained if you claim a deduction for a contribution of noncash property worth more than $5,000. In that case, you must also fill out Section B of Form 8283 and attach the form to your return.For more information see IRS Publication 526, Charitable Contributions, and for information on determining value, refer to Publication 561, Determining the Value of Donated Property. These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
by 
Erich J. Ruth
Erich J. Ruth provides technical support for National Software which is the parent company for 1099FIRE. 1099FIRE develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements. 1099FIRE is an employee-owned company located in Phoenix, Arizona.
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Dear Madam or Sir,
I have being struggling whether to 1099-Misc on the following situation:
We provide a $300.00 check as a charitable donation to this member of our church on a monthly basis. It is obvious that the yearly amount will go over the $600.00 limit and I was told by someone in the IRS that this is reportable under box 3 in the 1099-Misc. Can someone confirm this? If so, under what publication can this information be found? Thank you so much for any assistance.
> Can someone confirm this?
If you pay someone $600 or more per year, the IRS wants to know. You, as the payer, are required to send in Form 1099-MISC in this case. That $300 a month that the member from your church is receiving is taxable income.
Box 3 on Form 1099-MISC is Other Income and is the box that applies when all other boxes on that form do not apply.
> If so, under what publication can this information be found?
IRS publications get into the specifics of how to paper or electronically file. Your not looking for a publication.
Instead go to google and search for ‘Instructions for Form 1099-MISC’ and read through that. This link:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
has the instructions for 2012.
I hope this helps. Email anytime.