What you MUST keep for Charitable Deductions
What you MUST keep for Charitable Deductions:
Charitable donations are one of the most common tax deductions in the country. As such, tax-payers often have questions regarding what they need to do in order to prove a charitable contribution. We can help make sure you are deducting everything you are entitled to deduct with as little stress as possible.
Proving a charitable contribution starts with considering two things:
1) The size and nature of the donation (Was it cash or material?)
2) How the donation was made
If the donation was cash and was for under $250 you will want to provide the amount, check number, the date posted, and the name of the recipient. If done by credit card or electronic transfer, provide the date of the transaction as well. Donations in excess of $5,000 require additional documentation from an independent appraiser.
In order to prove cash donations of more than $250, you will need everything listed above as well as a letter or receipt verifying the donation from the receiving charity. The letter needs to verify the amount donated, whether the charity provided you goods or services in exchange for your donation, and a good faith estimate of the goods or services the charity provided you. You will need to do this for every individual donation you make. If your donation is an automatic donation taken from your paycheck, you will need to work with your employer to provide documentation.
If the donation was not monetary but material goods, you will need the following;
Name and address of the charity
Date and location of each contribution
Description of the items donated
Fair market value of the items donated and how you figured the value.
For material donations valuing $250-$500, you will also need a written verification to substantiate the deduction. If the material contribution is worth $500 or more, you will also be required to verify how you acquired the property, when you acquired the property, and your cost.
Navigating the complex and ever changing tax regulations can be extraordinarily difficult. As New York City Tax Accountants, we pride ourselves on helping our clients tax the stress out of tax related matters. Therefore, we recommend you contact Armel Tax for your free consultation today!
Anil Melwani | 05/22/2013