You must
have a receipt from the charity or a
bank record for all money donations, and
the non-profit organization must be a
tax-qualified charitable organization
for you to take the charitable
deduction.
You can not deduct the value of your time
or services spent on charitable work,
but you can deduct mileage or vehicle
expenses if you use your car for
charitable purposes, cash donations and
property.
Your deduction for charitable
contributions will generally be limited to
50% of your adjusted gross income. You
may deduct your charitable contributions
only if you itemize deductions.
Remember to ask the organization if
your contribution is tax-deductible, or
check with the IRS.
If you contribute to a charity and
receive something in return, like dinner
or gift, then your deduction is the
amount you paid or the value of the
property you donated minus the value of
the goods or services received.
Item Donations. When you donate
property you can deduct the
fair market value of the property, but
you must reduce the value of the donated
property by the
amount of ordinary
income or short-term capital gain as if you
had sold the property for that fair
market value. Capital gain property
describes donated
property, which if sold would result in
long-term capital gains.
If you donate non-cash items with a
total value of more than $500, you must
file Form 8283 with your return. You may
need a qualified appraisal for a donated
item or a group of items with a value of
more than $5,000.
If you donate a vehicle of any sort, with
a claimed value of more than $500, you can deduct the
lesser of fair market value or
the amount of gross proceeds the charity
received from the sale.
The charity will provide you with a copy
of Form 1098-C, that shows information
relating to your donation of the
vehicle. You must attach a copy of Form
1098-C to your return.
Limits on the Deduction. The deduction
for charitable contributions generally
is limited to 50% of your adjusted gross
income (AGI).
The deduction for
appreciated property is limited to 30%
of your AGI if you choose to deduct the
fair market value of the property, or 50%
if you choose to deduct the basis of the
property.
The 30%
limit also applies to donations of
property to some organizations.
A 20% limit applies to
gifts of capital gain property to or for
the use of an organization subject to
the 30% limit. Contributions in excess
of the limit can be carried forward for
up to 5 years.
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