Who, What, When, Where? No we're now writing a news article,
but the same theory applies when making a charitable contribution.
Who is receiving the contribution? What is it being used for? When is
it being given? Where is the money going?
The U.S. Government in Publication 526 defines a charitable
contribution as a donation or gift to, or for the use of, a qualified
organization. It is voluntary and made without getting, or expecting
to get, anything of equal value.
Beyond this basic definition, tax law gets complicated. First to
deduct a charitable contribution, you must file Form 1040 and
itemize deductions on Schedule A. The amount of your deduction
may be limited according to the following criteria.
Deductible Charitable Contributions
The law states that generally you can deduct your contribution
of money or property to or for the use of a qualified organization:
- Churches, synagogues, temples, mosques and other religious organizations
- Federal, state and local governments, if your contribution is solely for public purposes
(for example, a gift to reduce the public debt)
- Nonprofit schools and hospitals
- Public parks and recreation facilities
- Salvation Army, Red Cross, CARE, Goodwill Industries,
United Way, Boy Scouts, Girl Scouts, Boys and Girls Clubs
of America, etc.
- War veterans' groups
- Expenses paid for a student living with you, sponsored by a qualified organization
- Out-of-pocket expenses when you serve a qualified organization as a volunteer
If you give property to a qualified organization, you generally
can deduct the fair market value of the property at the time of the
contribution. Your deduction is generally limited to 50 percent of
your adjusted gross income, but in some cases 20 and 30 percent
limits apply. |
Non-cash contributions require additional record keeping
depending on whether your deduction for the contribution is:
- Less than $250
- At least $250 but not more than $500
- Over $500 but not more than $5,000
- Over $5,000
In figuring whether your contribution is $250 or more, do not
combine separate contributions. If you received goods or services in
return, reduce your contribution by the value of those goods or services.
Non-Deductible Charitable Contributions
You may not deduct the following as charitable contributions:
- Money or property you give to:
- Civic Leagues, social and sports
clubs, labor unions and chambers of commerce
- Foreign organizations (except certain
Canadian, Israeli and Mexican charities)
- Groups that are run for personal
profit
- Groups whose purpose is to lobby for
legislative changes
- Homeowners' associations
- Individuals
- Political groups or candidates for
public office
- Cost of raffle, bingo or lottery tickets
- Dues, fees or bills paid to
country clubs, lodges, fraternal
orders or similar groups
- Tuition
- Value of your time or services
- Value of blood given to a
blood bank
Confused? Call the office
for more information. It's not easy to give money away, but
when done properly, it can make a difference on your tax return!
Remember to keep those records! |
