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Get the Most From Giving Tuesday

-by Elizabeth Resendes, CPA, MST

Giving Tuesday, Donate

Giving Tuesday, November 29, 2016, is the official kick-off to the annual charitable season when people are encouraged to donate to their favorite nonprofit organizations. While most individuals are not focused on the tax benefits of their donations, there are ways to ensure that you make the most of your gifts for both the charitable organization and for yourself on your tax return. Here are a few things to keep in mind:

  • Be sure your charity of choice is IRS qualified; otherwise your contribution will not be tax deductible. The IRS website is a great resource to determine eligible organizations.
  • If you write a check, be sure it is mailed by December 31, 2016 to qualify as a deduction on your 2016 tax return. If you use a credit card, the card should be charged by December 31st. Your bill can be paid in 2017, as long as the transaction is posted in 2016.
  • Proper substantiation is critical in order for your charitable gift to be deductible. For a donation of $250 or more, you must receive a written acknowledgement from the charitable organization. The acknowledgement must state the date and amount of the donation and whether you received any goods or services in return for your donation (along with the value of any goods or services you received).
  • For donations under $250, proper substantiation is still important:
    • If the donation is being deducted from your paycheck, be sure to keep a copy of your pledge card showing the name of the organization. Also keep a pay stub, Form W-2 or other employer-provided document that shows the total amount of your donation.
    • If donating by check, keep a copy of your bank statement or cancelled check that shows the organization name, donation date and amount. For a credit card donation, keep your statement showing the date the transaction posted, as well as the organization name and amount. It’s also helpful to collect a receipt from a charitable organization for any amount that you donate.
  • For non-cash donations, like clothing or household goods, keep an itemized list of the items, along with the date and name of charity. If the total non-cash donation is valued over $250 you must receive an acknowledgement from the charitable organization (see above) in order to claim a deduction. If the value of all non-cash donations is over $500, more detailed reporting is required when you file your tax return (Form 8283). It is very important to reasonably value the items donated. Goodwill provides helpful guidelines for valuing used items in good condition:
  • Special rules apply for other types of non-cash donations, such as cars and boats, or appreciated stock.

Should you have any questions regarding charitable giving, please contact a Sansiveri tax professional at 401-331-0500 or