I often receive questions from clients and readers about what can and cannot be deducted as a charitable contribution on Schedule A.
Let us begin with a list of items that are not deductible:
* Contributions made directly to an individual or family, regardless of the recipient’s financial situation or health status. If you want to help a homeless family or a sick child you must give the money to a charitable organization that will provide the assistance in order to get a deduction.
* Contributions to an organization created to lobby for changes to federal, state or local laws.
* Contributions to political organizations or election campaigns.
* The value of blood donated.
* The value of your time to perform volunteer services.
* Contributions to non-profit homeowner or condo associations, or social or sports clubs.
* Contributions to foreign organizations.
* Raffle or “50-50” tickets. The purchase of a raffle ticket is not a contribution, even if the seller of the ticket is a charity. It is gambling! You are purchasing a chance to win a prize. Tickets purchased can, however, be deducted as gambling losses if you have any gambling winnings to report.
* The rental value of the use of a vacation property donated to charity for a “vacation auction”.
* Appraisal fees to determine the value of donated property (required if the value of the item donated is more than $5,000.00). These fees can, however, be deducted as a “miscellaneous deduction” subject to the 2% of AGI exclusion.
You can deduct:
* Cash or property given to a qualified tax-exempt organization created or organized in the United States or any possession under the laws of the United States or any state or possession.
* Out-of-pocket expenses connected with donations or volunteer service to a qualifying church or charity, such as the cost of the ingredients of homemade cookies or a cake donated to a church bake sale, or the cost and laundering of uniforms for a scoutmaster.
* Travel and transportation expenses incurred while performing a volunteer service for a qualifying church or charity. If you use your car you can deduct 14 cents per mile in lieu of actual expenses plus any parking fees and tolls. This amount is set by Congress and has not been increased for several years now.
* That portion of the cost of a ticket to a fund-raising event that is in excess of the “fair market value” of any goods or services you receive. If you buy a ticket for a fund-raising dinner for $100.00, and the cost of the dinner is valued at $35.00, you can deduct only $65.00. If you purchase a ticket to such an event and do not attend, but give the ticket back to the charity to be sold again, then you can claim a deduction. In such a case you are not receiving any value in return for your contribution. So if you bought a ticket to a fund-raising dinner and had planned to attend, but find out a week before that you will not be able to, give the ticket back to the charity and allow them to sell it again.
Of course, as we now all know, there are special rules and requirements for deducting cash and non-cash contributions.
To find out if a charity qualifies for a tax deduction go to the IRS website at www.irs.gov and enter “Search for Charities” in the Search for box and click on the first result. To check on the financial status of a charity go to www.charitynavigator.com.
TTFN
PS – A SPECIAL SUMMER OFFER FOR ORDERS POSTMARKED MY AUGUST 31st – RECEIVE ‘MY BEST ADVICE’ AND ‘DON’T FORGET TO DEDUCT’ AS PDF EMAIL ATTACHMENTS FOR ONLY $1.00!!! SEND YOUR $1.00 (PAYABLE TO ROBERT D FLACH LLC) AND YOUR EMAIL ADDRESS TO -
ROBERT D FLACH LLC
PMB 411
72 VAN REIPEN AVENUE
JERSEY CITY NJ 07306-2806
Let us begin with a list of items that are not deductible:
* Contributions made directly to an individual or family, regardless of the recipient’s financial situation or health status. If you want to help a homeless family or a sick child you must give the money to a charitable organization that will provide the assistance in order to get a deduction.
* Contributions to an organization created to lobby for changes to federal, state or local laws.
* Contributions to political organizations or election campaigns.
* The value of blood donated.
* The value of your time to perform volunteer services.
* Contributions to non-profit homeowner or condo associations, or social or sports clubs.
* Contributions to foreign organizations.
* Raffle or “50-50” tickets. The purchase of a raffle ticket is not a contribution, even if the seller of the ticket is a charity. It is gambling! You are purchasing a chance to win a prize. Tickets purchased can, however, be deducted as gambling losses if you have any gambling winnings to report.
* The rental value of the use of a vacation property donated to charity for a “vacation auction”.
* Appraisal fees to determine the value of donated property (required if the value of the item donated is more than $5,000.00). These fees can, however, be deducted as a “miscellaneous deduction” subject to the 2% of AGI exclusion.
You can deduct:
* Cash or property given to a qualified tax-exempt organization created or organized in the United States or any possession under the laws of the United States or any state or possession.
* Out-of-pocket expenses connected with donations or volunteer service to a qualifying church or charity, such as the cost of the ingredients of homemade cookies or a cake donated to a church bake sale, or the cost and laundering of uniforms for a scoutmaster.
* Travel and transportation expenses incurred while performing a volunteer service for a qualifying church or charity. If you use your car you can deduct 14 cents per mile in lieu of actual expenses plus any parking fees and tolls. This amount is set by Congress and has not been increased for several years now.
* That portion of the cost of a ticket to a fund-raising event that is in excess of the “fair market value” of any goods or services you receive. If you buy a ticket for a fund-raising dinner for $100.00, and the cost of the dinner is valued at $35.00, you can deduct only $65.00. If you purchase a ticket to such an event and do not attend, but give the ticket back to the charity to be sold again, then you can claim a deduction. In such a case you are not receiving any value in return for your contribution. So if you bought a ticket to a fund-raising dinner and had planned to attend, but find out a week before that you will not be able to, give the ticket back to the charity and allow them to sell it again.
Of course, as we now all know, there are special rules and requirements for deducting cash and non-cash contributions.
To find out if a charity qualifies for a tax deduction go to the IRS website at www.irs.gov and enter “Search for Charities” in the Search for box and click on the first result. To check on the financial status of a charity go to www.charitynavigator.com.
TTFN
PS – A SPECIAL SUMMER OFFER FOR ORDERS POSTMARKED MY AUGUST 31st – RECEIVE ‘MY BEST ADVICE’ AND ‘DON’T FORGET TO DEDUCT’ AS PDF EMAIL ATTACHMENTS FOR ONLY $1.00!!! SEND YOUR $1.00 (PAYABLE TO ROBERT D FLACH LLC) AND YOUR EMAIL ADDRESS TO -
ROBERT D FLACH LLC
PMB 411
72 VAN REIPEN AVENUE
JERSEY CITY NJ 07306-2806
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