“As 2014 tax filing time approaches, it is a good idea to ensure you have all the documentation IRS requires for charitable contributions,” says CPA Sharon Mays.
The IRS reminds individuals and businesses making year-end charitable contributions of several important tax law provisions and the substantiation requirements to deduct the contributions. Some of the key requirements are that you must:
- Obtain a written acknowledgement from the charity for gifts worth $250.00 or more. This includes cumulative gifts during the year for $250.00 or more.
- Have a bank record or written statement from the charity, regardless of the amount. Credit card receipts and canceled checks for cumulative amounts under $250.00 are acceptable.
- Be able to support the donation was in 2014. Donations by credit card are considered 2014 donations if charged on Dec. 31, 2014 or before. Checks written on or before Dec. 31, 2014 are applicable for 2014 if mailed before Dec. 31, 2014.
- Ensure that the charity is eligible. IRS will not allow a deduction for donations (such as helping a needy family) if the donation was not through an eligible charity.
- Report the value of donations of cars, boats, and airplanes valued at more than $500.00 as the amount the charity actually received from their sale of the item.
- Be careful at auctions and other fundraisers. You can only deduct amounts paid that exceed the fair market value of the item purchased. This includes the value of tickets for the event that included a meal. You must reduce the donation by the value of the meal or other benefit received.
- File Form 8283 with the tax return for all noncash contributions over $500.00.
For more information call Sharon S. Mays, CPA
Mays & Associates at 770-740-8092 or email smays@mayscpas.com.
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