Year End Tax Tips: Charitable Giving

• Qualified charities. You can only deduct gifts you give to qualified charities. Use the IRS Select Check tool to see if the group you give to is qualified. Remember that you can deduct donations you give to churches, synagogues, temples, mosques and government agencies. This is true even if Select Check does not list them in its database. It is also helpful to check Guidestar to ensure that charities are using donations wisely. For example, Therapet received a Guidestar Gold rating as a result of our committment to transparency.

• Monetary donations.  Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return. The statement must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, or bank, credit union and credit card statements. If you give by payroll deductions, you should retain a pay stub, a Form W-2 wage statement or other document from your employer. It must show the total amount withheld for charity, along with the pledge card showing the name of the charity.

• Household goods.  Household items include furniture, furnishings, electronics, appliances and linens. If you donate clothing and household items to charity they generally must be in at least good used condition to claim a tax deduction. If you claim a deduction of over $500 for an item it doesn’t have to meet this standard if you include a qualified appraisal of the item with your tax return. If you are not sure what the fair market value of an item might be, the Salvation Army has a value guide on their website.

• Records required.  You must get an acknowledgement fom a charity for each deductible donation (either money or property) of $250 or more and many tax experts suggest keeping these records for smaller gifts as well. These statements are in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements.

• Year-end gifts.  You can deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2015. This is true even if you don’t pay the credit card bill until 2016. Also, a check will count for 2015 as long as it is postmarked by the post office or marked as sent second day delivery or faster by FedEx, DHL, UPS, etc. by Decmeber 31, 2015.

• Special rules.  Special rules apply if you give a car, boat or airplane to charity. For more information visit IRS.gov.