IRS Offers Tips for Year-End Gifts to Charity

If you’re in the giving spirit and planning to make a few gifts to charity, the IRS wants to make you aware of tax-law provisions that recently went into effect.

Some of the changes to keep in mind:

Charitable Contributions of Clothing and Household Items. The IRS says household items include furniture, electronics, appliances and linens. If you are planning to donate clothing and household items, they must be in good condition in order to be tax-deductible. However, if the clothing or household item is being claimed for a deduction of more than $500, it does not have to meet this standard, provided that a qualified appraisal of the item is included with the return.

Says the IRS, “Donors must get a written acknowledgement from the charity for all gifts worth $250 or more. It must include, among other things, a description of the items contributed.”

Guidelines for Monetary Donations. The IRS says you are required to have a bank record or a written statement from the charity in order to deduct any donation of money, regardless of the amount. Furthermore, the record must display the name of the charity and the date and amount of the contribution. Your credit card statements should display the charity’s name, the date, and the transaction posting date.

Donations of money include those made in cash or by check, electronic funds transfer, credit card, and payroll deduction. When it comes to payroll deductions, you must keep a pay stub, a Form W-2 or similar documentation provided by your employer, which displays the total amount being withheld for charity. You must also keep the pledge card showing the name of the charity.

The IRS says these requirements for the deduction of monetary donations will not change the requirement for taxpayers to obtain an acknowledgment from a charity for each deductible donation of $250 or more.

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