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Deducting ice bucket challenge donations

By Kay Bell · Bankrate.com
Tuesday, August 26, 2014
Posted: 10 am ET

You've seen the videos. People -- from average Janes and Joes to celebrities, athletes and even politicians -- are getting soaked with ice water.

The brief but freezing showers are part of the ALS Ice Bucket Challenge. It's an effort to increase awareness of and raise money to fight Amyotrophic lateral sclerosis, or ALS, which also is known as Lou Gehrig's disease.

Once a person has been soaked, he or she then challenges others to do the same, or in lieu of the ice water deluge, make a donation to the ALS Association.

It's apparently working.

It also could provide a tax deduction for some.

Bringing in big bucks

Not only have people been talking about the stunt all summer, the ALS Association reports a massive increase in donations.

The nonprofit organization says that as of Aug. 18, it has received $15.6 million in donations. For the same fundraising period last year, the nonprofit had brought in just $1.8 million.

Just as important to the group, this year's money has come from more than 300,000 new donors.

The ice bucket challenge is a fun and catchy way to get people thinking about a devastating neurological disease. Kudos to ALS for coming up with this innovative approach.

Thanks also are due to all those who have donated.

Even Uncle Sam is grateful. In addition to contributing to a worthy cause, many people also might be able to deduct their gifts to the ALS Association.

Deductible donation rules

Since the thousands who have endured the icy blasts have us thinking about giving, it's a good time to review the tax rules on charitable donations.

Here are three key things to keep in mind when giving.

First, make sure you give to a nonprofit that is approved by the Internal Revenue Service. These are 501(c)(3) groups, which is the tax code section governing their operation.

The IRS keeps a list of the organizations that meet the requirements. Go to IRS.gov and type "qualified nonprofits" into the search box in the upper right corner of the Web page and the first link that appears goes to the agency's online search tool of exempt organizations.

Second, get a receipt from the group to which you donate your money or property. Although in most instances you won't need to submit it with your tax return, you will need the documentation if the IRS questions your charitable gift.

Third, remember that you'll have to itemize to claim the donation as a deduction. If you don't need to file a Schedule A for any other reason, then it's probably to your tax advantage to claim the standard deduction instead of itemizing.

In that case, you won't get a deduction for your gift.

The Bankrate tax tip on charitable gift deductions looks at the IRS' full donation deduction rules.

I know that the tax break is not why you give to ALS or any other charity. But if your generosity can save some tax dollars, take it!

More tax info from Bankrate

Want the latest news on taxes, money-saving tax tips, tax scams and myriad other tax matters? Subscribe to Bankrate's free Weekly Tax Tip newsletter.

You also can follow me on Twitter: @taxtweet.

Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and co-author of the e-book "Future Millionaires' Guidebook."

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