FOX 4 Finances Live Chat

FOX 4's financial expert Kathy Stepp has a few suggestions on how to make smart charitable contributions.

Making Charitable Contributions

You may have been making charitable contributions all year.  Many people especially think about charitable contributions now, during the holiday season and at the end of the tax year.  Have you been keeping track of ALL of your charitable contributions?  How can you make some last minute contributions?  Is all "charity" tax deductible?

What is a tax-deductible contribution?

Cash contributions to qualified charities are tax-deductible.  Qualified charities include churches, some not-for-profit organizations, etc.  Ask your charity if it qualifies under IRS codes.  It is now a requirement that you have a receipt for all cash contributions.  Cancelled checks do not qualify as receipts!

In addition to cash contributions, contributions of clothing and household items are tax-deductible.  If you volunteer for a charity, your actual time is not tax-deductible, but your mileage driving to and from the charity is tax-deductible.

What does the IRS require in order to claim a charitable contribution?

Charities are required to provide you with a receipt for your donations.  Keep these receipts for tax purposes!  The receipts are necessary in order to take the charitable deduction.  However, the IRS recognizes that sometimes receipts are not necessary, such as when you make small cash contributions to the Salvation Army bellringers at Christmastime.  The IRS allows "reasonable" deductions for cash without receipts.

What should be done now to make last-minute charitable contributions this year?

In order to make some last-minute charitable contributions this year, consider giving away clothing and household goods that are no longer useful to you but in good shape.  Call the charity of your choice to arrange pick up or drop off.  Remember to get the receipt!

Not everything is tax-deductible.  Remember: the charity must be qualified.  Also, if you buy something through a charity, only that part over and above the fair market value of the goods received is tax-deductible.
 

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