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IRS Provides Tax Tips For Individuals and Businesses Making Year-End Charitable Donations

Posted on the 17 November, 2009 at 9:21 pm Written by in Taxes

The IRS has issued guidelines for taxpayers making year-end charitable contributions.

 The IRS reiterated that contributions are deductible only if made to qualified organizations.

 Credit Card

 Contributions are deductible in the year made. Therefore, if you charge a donation on a credit card before the end of 2009, it is deductible in 2009. This is true even if you do not pay the credit card bill until 2010.

 Clothing and Household Goods

 Donations of clothing and household items must generally be in “good used condition or better” to be deductible.

 The fair market value of used clothing and other household items is usually far less than the original purchase price. There are no fixed methods for determining the value of used clothing. Taxpayers should claim the price used in thrift and consignment stores.

 If you donate property at a charity’s unattended drop site, you should maintain a written record of the donation, including information as to the property donated, location of the site, charity’s name, description of the property, and method used to determine the value. Additional substantiation rules apply to contributions of $250 or more.

 Regardless of the amount, donations of money must be evidenced by a bank record or a written communication from the charity. You must also get an acknowledgment from the charity for each deductible contribution (either money or property) of $250 or more.