Taxation & Estate Planning

IRS Regulations and Guidelines for Giving to Charities

By Darrin Mish

With the Christmas season comes the custom of giving. If you wish to donate to charities at the end of this year, you can have your contributions eligible for tax deductions. However, the IRS has issued certain official guidelines you need to adhere to.

Firstly, you only qualify for tax deductions on your donations if they are made to a qualified charity. Hence it is important to check out the charity you intend to donate to first before giving to them. Also, you need to make your tax deductions in the same year you make your donation as it will not be eligible for deductions in subsequent years.

There are also some changes in tax laws that may affect you. If you are an Individual Retirement Account (IRA) holder aged seventy and a half or older, you may directly donate up to $100,000 tax-free to a qualified charity. Furthermore, your contribution must be send directly by the retirement account trustee to the charity. But distributions from employer-sponsored retirement plans, simple IRAs and simplified employee pension plans cannot be included.

To be granted your tax deduction, you need to furnish the IRS a bank record or written confirmation from the charity organization stating its name, the date and amount of your donation.

If you intend to donate non-monetary contributions such as clothing, household items and other forms of property, make sure that they are in good condition. The exception to this is when the deduction you claim for exceeds $500, in which case you need to include a qualified appraisal of the items you donated in your tax returns. If you wish to donate an airplane, boat or motor vehicle to a charity, the deduction you are allowed to make is usually limited to the gross profit from the sale, if the amount claimed exceeds $500.

For any amount claimed that exceeds $500 from non-monetary contributions, you have to fill up Form 8283 and submit it together with your tax return.

The IRS requires that you itemize your contributions on Form 1040 Schedule A which is used for contributions to charitable organizations. You also need to get a receipt from the charity that states the name of the charity, the date of your contribution and a description of the items donated.

If you want more details about tax deductions from donations made to charities, please refer to the IRS website at www.irs.gov.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.

IRS Regulations and Guidelines for Giving to Charities is a post from: IRS Tax Problem Solver Blog - IRS Help

Full post as published by IRS Problem Solver Blog on January 05, 2010 (boomark / email).