By Venar Ayar
The Ayar Law Group
The holidays are a wonderful time to make donations. And those donations can be tax deductions.
Charitable donations can only be valid deductions if they are given to a qualified organization. Most charities qualify for the contribution deduction, but taxpayers can ask to see the organization's letter from the IRS or search online to ensure they are donating to a qualified organization.
Taxpayers should always receive receipts for any donation in case of a future audit. The receipt must include the date, the amount and the name of the organization that received the donation. It is also important to keep detailed records of all donations in case it is necessary to justify their value.
Monetary donations are not the only type of charitable gifts that can be deducted from tax returns. Another option people have is to donate property that has appreciated in value, such as stocks. By doing this, not only can the fair market value of the donation be deducted, but the capital gains tax can also be avoided.
On the other hand, time is not considered a donation. Therefore, when taxpayers volunteer their services for a charitable organization, it is not considered tax deductible by the IRS.
In order to claim a contribution deduction, the deductions must be itemized on tax returns. Charitable donations are deductible during the year in which they are paid, so all gifts must be given by Dec. 31 to count during the current tax year.
It is important to remember that a tax deduction isn't guaranteed. These tips will help taxpayers follow rules set by the IRS and make sure donations count on tax returns. Any questions or concerns about charitable contribution deductions should be directed towards a qualified tax professional.
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For more information visit. www.ayarlawgroup.com.
Published: Thu, Dec 10, 2015
