If taxpayers gave money or goods to a charity in 2016, they may be able to claim a deduction on their federal tax return. Here are some important facts about charitable donations:
- Qualified Charities. Taxpayers must donate to a qualified charity. Gifts to individuals, political organizations or candidates are not deductible.
- Itemize Deductions. To deduct charitable contributions, taxpayers must file Form 1040 and itemize deductions. File Schedule A, Itemized Deductions, with a federal tax return. Advance Tax Relief LLC – We Solve IRS Tax Problems http://www.advancetaxrelief.com BBB A+ Rated – As Seen on TV (800)790-8574
- Benefit in Return. If taxpayers get something in return for their donation, they may have to reduce their deduction. Taxpayers can only deduct the amount that exceeds the fair market value of the benefit received. Examples of benefits include merchandise, meals, tickets to events or other goods and services.
- Type of Donation. If taxpayers give property instead of cash, their deduction amount normally limited to the item’s fair market value. Fair market value is generally the price they would get if the property sold on the open market. If they donate used clothing and household items, those items generally must be in good condition or better. Special rules apply to cars, boats and other types of property donations.
- Noncash Charitable Contributions. File Form 8283, Noncash Charitable Contributions, for all noncash gifts totaling more than $500 for the year. Complete section-A for noncash property contributions worth $5,000 or less. Complete section-B for noncash property contributions more than $5,000 and include a qualified appraisal to the return.
- Donations of $250 or More. If taxpayers donated cash or goods of $250 or more, they must have a written statement from the charity. It must show the amount of the donation and a description of any property given. It must also say whether they received any goods or services in exchange for the gift.
If you have been contacted by the IRS or have IRS tax problems, Get a free consultation from an experienced tax relief expert today (800)790-8574 or visit our www.advancetaxrelief.com