Give and thou shall receive
Posted on 01/25/2010
Tax season is rolling around again and it’s time to collect all of your financial documents to prepare your taxes. Donating to a nonprofit is a great way to help your community. But if you need more incentive to give, know this – most donations are tax deductible. Here is how to properly keep records of your donations for tax season.
Cash donations under $250. Donations require a written record of the amount and the name of the organization that received the gift. If you write a check, keep a copy of the cancelled check or your statement and make sure you have the date posted, the amount and the name of the organization. When using a credit card, the receipt showing the name of the organization, date and amount will suffice.
Donations exceeding $250. The rules changes slightly as you will need a written acknowledgement from the organization. Keep your check or credit card record as well.
If you receive any goods or services in return for your donation, ensure you have acknowledgement of receipt and the value of the goods and services rendered.
In order for you donation to be tax deductible, the organization must be qualified according to the IRS. Generally, if the group is religious, educational or works to prevent cruelty to children or animals, they are qualified, but to be sure ask the organization or the IRS. Any amount of money is deductible but for smaller amounts the paperwork may be more hassle than the deduction is worth.
Remember that donations of material goods can also get you a deduction. Ask the nonprofit for a receipt with the value of the goods given.
Talk with your accountant or a tax professional for any further questions and help in completing your taxes for maximum deductions.