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For Tax Purposes: A Charitable Giving Checklist

Personal Finance

Although tax laws change, one thing stays the same: It is more blessed to give than to receive. With giving comes the added blessing of being able to claim donations on your tax return—a smart financial move for your family. May you enjoy the act of giving this season, keeping the following in mind for maximum 2014 tax savings.

Before December 31, 2014:

Verify the charity’s tax status.

An organization must have federal tax exempt status for your donation to be tax deductible. Make sure the organization you’re donating to qualifies, especially if it is one you’ve never given to before. The easiest way to verify is to ask whether they have received a 501(c)(3) determination letter from the IRS. You can look up many organizations on the IRS website to see if they have been declared a “public charity,” which is the designation they receive when the 501(c)(3) application is approved. Churches, by their nature, are tax exempt under federal law. Some charities may not have their own 501(c)(3) determination letter but instead fall under the tax exempt umbrella of another related charity.

Know this year’s deduction limits.

There is no limit on how much you give in any year, but the IRS limits how much you can deduct on your taxes for your giving. Deduction limits are dependent on the type of property you give and the type of organization to which you give. Gifts to public charities are generally more deductible than gifts to private foundations. And you can claim higher deductions for gifts of cash and securities than gifts of real estate. If you give more than you can deduct in any given year, you can often carry forward deductions into future years.

If you plan to give to individuals, make sure you take note of gift tax limits. Keeping gifts to your children or grandchildren under the gift tax annual exemption will save you from gift tax headaches. For 2014, the IRS allows a person to give a total of $14,000 to any number of recipients free from any gift tax. This means a husband and wife can transfer $28,000 (two $14,000 gifts) to the same individual or several people.

Meet the deadline.

If you want to deduct your contribution for the 2014 tax year, make sure it is postmarked by December 31, 2014. Credit card donations also count as long as the contribution is made by that day.

Make sure donated clothing and household items are in good condition.

This rule applies to furniture, furnishings, electronics, appliances, and linens. Non-cash contributions greater than $250 require documentation and substantiation to support the gift. If you deduct more than $5,000 for an item, you must include a qualified appraisal of the item. In addition, if your total deduction for all non-cash donations is over $500, you will have to submit Form 8283 with your return.

Get a receipt.

For any donation of $250 or more, you must obtain an acknowledgement from a charity. This applies to both money and property. Receipts should show the name of the charity, the date, the amount donated, and a reasonably detailed description of the property donated. If no one is available to give you a receipt when you drop off your goods, keep a written record of this information yourself, as well as the fair market value of the donated items and how this was determined.

Special note on vehicles:

If you wish to donate a car, your deduction amount will be based on how the charity uses it or, if they sell it, the price it receives. Ask the organization to provide you with Form 1098-C.

Before April 15, 2015:


You must itemize your deductions using Form 1040 Schedule A. If you simply use the standard deduction, charitable giving contributions will not be counted. Keep in mind, you’ll only be able to save on taxes if your total itemized deductions are more than what the standard deduction amount would be.

To view the IRS regulations for year-end giving, click here.

To explore options that can help you prepare and possibly save money at tax time, contact one of our planned giving consultants today at 866.892.0629.

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