How to save on your taxes with charitable donations
LOS ANGELES - If the holidays put you in a generous mood, here's how to make sure your charitable donations will translate into savings on your federal income tax return.
Donations gifted to a tax-exempt charity before December 31 can usually be deducted, so here are some tips, courtesy of the IRS:
Only donations to eligible organizations are tax-deductible. Go to IRS.gov and search their database for eligible charities. Religious groups and government agencies ARE still eligible, even if they aren't listed in the database.
You must itemize using form 1040 Schedule A. Charitable deductions are not available to individuals who choose the standard deduction.
Get proof of monetary donations. You'll need a bank record or a written statement from the charity that includes the date and the amount gifted. This include cash, check, electronic funds transfer, credit cards, and payroll deduction.
Property donations must be in good condition to qualify. You'll also need written acknowledgement from the charity for all gifts worth $250 or more. Cars, boats, and other items have their own special rules, so visit IRS.gov for help with appraisal.
Note anything you receive in exchange for your donation. If the organization gives you a coffee mug, tickets, a meal or any other goods or services as a 'thank you', you must include a description of that gift and its value.
So, keep track of everything, and give generously! It's a good thing to do for your community-- and for yourself too.