In honor of #GivingTuesday, here are a few reminders regarding when your charitable donations will also qualify for a tax deduction:
- Only donations to qualified charities are deductible:
- If in doubt, you can check the organization’s status on using the EO Select Check tool on the IRS website.
- Contributions to synagogues, mosques, churches, mosques, and government organizations (like your public school) are deductible even if they are not listed on the website.
- Good causes don’t always equate to tax deductions:
- Remember that just because a donation is going to a good cause doesn’t mean your contribution is deductible. For example, if your neighbors are driving to support a disaster area with a truckload of water and supplies to hand out to anyone who asks, it may be helpful, but it is probably not deductible.
- Donations of cars, boats, inventory and other property have special rules:
- You may not be able to deduct as much as you think and additional documentation may be required. Find out how the donation will be used and what documentation you need to get before you make the donation.
- Secure a written receipt or acknowledgment from the charity:
- This is the best way to support the deduction.
- If you received anything of value in return for the contribution, it should be included in the acknowledgement. If you didn’t receive anything of monetary value, the acknowledgement must say that to be valid.
Charitable deductions are a hot topic in tax reform conversations and changes may be coming for 2018. If you are planning on making contributions in 2018, you may want to consider moving those to 2017 if possible. As always, consult your tax advisor if you have any questions regarding your specific tax situation.
At Smith Leonard, we are committed to supporting charities in our community. Happy #GivingTuesday.