Get a tax deduction for charitable giving

Make sure goods are in good shape

In addition to cash gifts -- which in the IRS' eyes include not only currency, but also the previously mentioned donations made with checks and credit cards -- you might donate household goods. In this case, you get to count the item's fair market value as your donation amount.

Donated personal property, however, must be in good or better shape for your deduction to count. This rule was enacted several years ago to prevent people from giving away worthless items to charities and then claiming excessive value amounts as tax deductions.

Special rules also apply to donations of motor vehicles. No longer can you simply deduct the Kelley Blue Book price of the auto. You need to find out how the charity will use the vehicle and, if the group sells it, what price it receives. That will determine how much you can claim.

Get receipts

Regardless of the type of gift, its amount and to which charity you donate it, get a receipt.

The IRS actually demands receipts when a donation is more than $250. In some cases, appraisals also are required.

In most cases, the receipts are for your records only, just in case the IRS later has questions about your deduction. If you don't get a receipt or other formal acknowledgment from the charity when you donate, ask for one.

A legitimate tax-exempt organization will have no problem giving you a receipt when you make your donation or later mailing (or emailing) one to you.

Now that you know the IRS rules on tax deductions for donations, all you have to do is decide which charities get your year-end contributions.


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