Spring is here! For some people, that means a busy season of tax returns and or others, it means a busy season of cleaning out the house. But for all of us, it means Day Light Savings springs us forward in time, the cold winter fades, and the warmer weather gives our morale a boost! And speaking of Spring cleaning…

Instead of tossing your old clothes or furniture or whatever it may be away, consider donating it to a local charity. Whether you donate to Goodwill, Salvation Army, religious groups, veteran’s groups or to a government organization, donating can be good for tax reason, and well, it’s always nice to pay it forward. However, in order for your donations to be tax deductible, here’s some guidelines to follow.

First and foremost, note that when donating property like clothing or furniture, fair market value is used to determine the deductible amount. Therefore, if you’re giving away a toaster, you could get anywhere from $4 to $12, depending on variables like the condition it’s in, what type it is, etc. Also, note that when donating, it’s a good idea to take pictures of what you’re donating to have records that your donated items were in good condition and keep an itemized list with it. Further, note things like the name and address of the charity, the date, a description of the donations and what the fair market value is.

Now for the nitty gritty!

If you’re making a cash donation, make sure not to combine contributions, keep them separate. Have either a canceled check, bank statement, or credit card statement with the organization’s name, date, and amount of contribution, a receipt showing the organization’s name, date and amount of contribution or a payroll deduction record. Keep in mind this is the course of action for donations less than $250. If over $250, you will need to include written acknowledgment from the organization stating the date and amount of contribution, whether any goods or services other than intangible religious benefits were provided by the charitable organization, and a statement that the only benefit the taxpayer received was an intangible religious benefit if that is the case. Follow these guidelines for cash donations up to $500 and even up to and over $5000.

On the other hand, if your donation is a non-cash contribution that is under $250, you will need a receipt from the organization showing their name, the date, location of contribution, and a detailed description of what was contributed. If the non-cash donation is $250-$500, though, then you will need written acknowledgement from the charity showing the date and location of the donation, a detailed description of what was donated, whether any goods or services other than intangible religious benefits were provided by the organization, and a statement that only benefit the taxpayer received was an intangible religious benefit if that is the case. For non-cash donations for $501-$5000, you will need the same information as you would for the $250-$500 range PLUS how the property was acquired, approximate date it was obtained and cost. And lastly, for amounts over $5000, the same rules apply as $250-$5000 noncash contributions.

Keep in mind that if a donation is part contribution, part goods or services, a written statement from a charity is required if the donation is more than $75.

It can get a bit tricky so if you have any questions, feel free to give me a call and ask about your donations!