Guide to Understanding the Ins and Outs of Charitable Donations and Tax Deductions

Guide to Understanding the Ins and Outs of Charitable Donations and Tax Deductions
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Making a donation to charity is easy, right? You just clean out your closet or garage, box up the unwanted items, and tote them down to your local thrift store. When you are half-way home, you remember that you forgot to ask for a receipt for your donation. Well, no big deal, it is still tax-deductible, isn’t it?

Fast forward to the day you are sitting across the desk from your tax preparer, who is patiently waiting for you to produce receipts for the donations you made.

“How many bags of items did you donate?,” he asks. “Uhh…I’m not sure…maybe four or five?” you reply. “And, what was the market value of those items?” You respond with a blank stare and a desperate wish that you had (a) asked for receipts, (b) written the fair market value of the items on the receipts, and (c) filed the receipts where you could find them when needed.

Donating unused or unwanted items or making cash donations to organizations who are soliciting for funds is a good way to help others while you help yourself. After all, you are entitled to take a tax deduction for donations, if you play the game by the rules. In the articles below, we will explain the rules and regulations you need to know and offer tips for record keeping.

What Will Goodwill Take as Donations?

Did you know there are some items Goodwill Stores will not accept

You may be surprised that there are items that charitable organizations such as Goodwill consider as “unacceptable.” Learn more about unacceptable donations and hazardous items so you don’t end up hauling such items back home again. If you are curious about the tax benefits, you’ll also find some helpful information about that topic.

How Much Tax Deduction Can You Claim for Donated Eyeglasses and Hearing Aids?

Did you know that you might be entitled to take a tax deduction for donating items such as hearing aids or eyeglasses? Find out how such donation programs work and what type of documentation you will need to validate your claims.

Tax Deductions: Mileage for Charity Work

The good news for taxpayers looking for every little legal tax deduction is that you can claim a deduction for mileage associated with charity work. The bad news if you don’t know how to prepare your documentation or what receipts and so forth you should keep, you could find your claim disallowed. Discover what you need to keep and how much you might save.

What Information Should a Donation Receipt Include?

The IRS will disallow your claim for a charitable donation if your paperwork does not comply exactly with their guidelines. While you want to believe that the organization issuing the donation receipt would be aware of the guidelines and make sure that their paperwork is in compliance, it is ultimately your responsibility as the taxpayer to make sure that you receive the documentation you need to substantiate your claim.

Tax Deductions: Adopt a Family Charitable Donations

You have probably seen an “Angel Tree” or similar type of promotion in your community during the holidays. The premise is you “adopt” a family and provide money or gift items for their holidays. Like so many other donations made to charities, these items may or may not be considered tax-deductible, so be sure you are aware of all the regulations.

Claiming a Tax Donation for Car Donations

Vehicle donations are aggressively pursued by many charitable organizations with the promise that the donor will benefit by being able to take a tax donation. However, it will come as no surprise to you to learn that if the IRS guidelines are not strictly followed, you won’t be taking that donation after all. Protect yourself by understanding the process and paperwork requirements.

Charities That Accept Car Donations

Now that you are well-versed in the car donation process, you might be wondering just which charities are looking for your unwanted vehicle. Here is a guide to some well-known charities that will take your car as a donation along with some information about the organization’s mission.

Reasons to Donate Money to Charity

While the attraction of taking a tax deduction is the motivating factor for many individuals, there are other benefits to making donations to charities and fundraising efforts in your community. Learn more about why you should you give those unwanted items to a charity instead of selling them and keeping the money for yourself.

Charitable Donation Receipt Sample and Template

If you are a charitable organization, you will appreciate the convenience of having a ready-made template for your donation receipts. Just download it, customize it for your organization, and print. If you are a donor, you might want to download and keep it as a sample of the kind of information a typical donation receipt should include.

Accounting Tips for Non-Cash Deductions

Keeping tabs on “cash” donations is usually pretty easy…because most of the time you probably wrote a check for the donation instead of handing over cash. If you do donate cash, you probably remembered to ask for a receipt for tax purposes. However, tracking those non-cash donations can be challenging, especially when you have to keep up with them for an entire year.

Administrative Costs: The Hidden Costs of Charitable Donations

One of the serious concerns about donations to charities is verifying exactly how much of the money will actually go the charitable organization and how much will be used for the organization’s operating expenses. While every group has operating expenses, it is a fact that some charitable groups are better stewards of their funds than others. Here is some important information on how you can find out for yourself about any hidden costs.

What Should Be Included When You Get a Receipt for Donated Items?

If claiming a tax deduction for a donation—either monetary or non-monetary—is really important to you, you need to do your due diligence and make sure the receipt that you are given includes all the information the IRS requires. The responsibility for the accuracy of the receipt is on the taxpayer not the charitable organization so be sure you know what should be included.

Example of a Non-Cash Donation Receipt

Reading this article may not be the most fun you have ever had but it will equip you to know what needs to be on any receipt you receive for a non-cash donation. Here’s a plain English explanation of the IRS rules about these types of donations.

Answers to Commonly Asked Tax Questions

You have questions about filing your taxes and claiming those charitable donations as tax deductions; we have answers. In addition to helping you understand what you need to know about claiming donations to charities, we will provide you with lots of other valuable tax deduction information.

Supporting Charity on a Budget

If you have a favorite charity that you would like to support but you lack the discretionary funds, you will love the creative ideas you’ll find here. For instance, did you ever think about having a fundraising party and asking friends and family to be the donors? Here are some real world ways for you to support a charity whether you can afford to or not.