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Important Tips

Start gathering any items necessary for the preparation of your tax returns, including charitable contribution receipts, stock trans- actions, business mileage records, medical expenses, moving expenses, unreimbursed business expenses, etc.

Your Gift Might Be Tax Deductible

If you support certain causes throughout the year, your gift might be tax deduct- ible and reduce any tax you owe. If you want to claim a tax deduction for your charitable donations, you must itemize your deductions.

Also, the donations must meet certain requirements to qualify for a deduction.

Qualified charities. You can only deduct donations to qualified charities. Qualified charities meet exemption requirements un- der the IRS Tax Code 501(c)(3). The nonprofit organization is exempt from federal income tax if its activities have the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition or pre- venting cruelty to children or animals.

Monetary donations. Gifts of money include those made in cash or by check, elec- tronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return.

Household goods. Donated clothing and household items generally must be in at least good used condition to be claimed as a tax deduction. If you claim a deduction of over $500 for an item, it doesn’t have to meet this standard as long as you include a qualified appraisal of the item with your tax return.

Records required. You must get an additional acknowledgement from a charity for each deductible donation (either money or property) of $250 or more. Addition rules apply to the statement for gifts of that amount.

Quote Corner

“It’s not how much we give but how much love we put into giving.” ~ Mother Teresa

Did You Know?

There are more than 1.5 million non- profits in the U.S. More than 50% of them operate on less than $100,000 annu- ally. Many of these are local groups, such as Little League or the Boy Scouts.

Rita Bhayani is a Certified Public Accoun- tant and a Certified Management Accountant practicing at Pleasanton, CA and she protects the clients from the IRS. She provides tax planning, accounting, payroll and outsourced CFO services too. For more information log on to Reprinted with permission from the National Association of Tax Profes- sionals.

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