Wednesday, December 23, 2009

IRS Tips for Making Charitable Donations

The end of the tax year is rapidly approaching, and lots of donors are making their final charitable gifts to their favorite charities. So many of you have shown such generosity to WIN this year, and I'm so grateful to each of you.

I thought it was a good time for a few reminders:

It's not too late to make a year end gift to Workers Interfaith Network. You can donate online through Dec. 31 and it will still be counted for this tax year. If you give by check, the check must be mailed no later than Dec. 31 (send to WIN, 3035 Directors Row, B - 1207, Memphis, TN 38131.

Your generous gift of any size will enable WIN to do the following in 2010:
  • partner with the growing number of workers to recover stolen wages from their employers.
  • press government agencies and elected officials at the federal, state, and local levels to do more to protect workers from dangerous working conditions and wage theft.
  • offer more training opportunities to low-wage workers, including safety training classes for construction workers and English as a Second Language classes.
Also, I thought folks might want to know a few things that the IRS wants you to know about making charitable contributions:
  • To be deductible, charitable contributions must be made to qualified organizations. Most organizations can tell you whether they are qualified. As a 501(c)(3) organization, WIN is a qualified organization.
  • In order to deduct your charitable contributions, you must itemize deductions, using Form 1040, Schedule A.
  • Generally, monetary donations are deductible, as well as the fair market value of most property donated to a qualified organization. Special rules apply for several types of donated property, including clothing, household items, cars, and boats.
  • 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 only deduct the amount that is more than the fair market value of the benefit you received. Small items that have only a token value do not affect the deductibility of your contribution.
  • Regardless of the amount your donate, it is important to keep good records of contributions made. Cash contributions require a receipt. Keep cancelled checks or a bank or credit card statement, a payroll deduction record, or a written record from the charity that contains the date and amount of the contribution alsong with your name. (For donations to WIN, the thank you letter we send you contains all the necessary information you'll need, so be sure to keep it.)
  • Only contributions actually made during the tax year can be deducted. So if you pledged to give $500 to a charity during the year, but only gave $200 by Dec. 31, only the $200 is deductible.
  • Include credit card charges and payments by check in the year they are given to the charity, even if you do not actually pay the credit card bill or have your bank account debited until the next year.
  • For any contribution of $250 or more, you must have a written acknoweldgement from the organization to validate your donation. It must include the amount given or a description of property donated, and whether the organization provided any goods or services in exchnage for the gift. (Again, thank you letters from WIN provide all this information.)
  • To deduct charitable contributions of noncash items that are valued at $500 or more, you must complete Form 8283, Noncash Charitable Contributions, and attach the form to your tax return.
  • If you are donating a noncash item worth more than $5,000, generally you must obtain an appraisal.
More information is available from the IRS in Publication 526, Charitable Contributions.

Hope this helps as you finish your year-end giving!

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