As tax filing season approaches, the Internal Revenue Service reminds taxpayers who give money or goods to a charity by Dec. 31, 2016, that they may be able to claim a deduction on their 2016 federal income tax return and reduce their taxes.
Only donations to eligible organizations are tax-deductible. IRS Select Check on IRS.gov is a searchable online tool that lists most eligible charitable organizations. Churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations even if they are not listed in this database.
Claiming Charitable Donations
Only taxpayers who itemize using Form 1040 Schedule A can claim deductions for charitable contributions.
A bank record or a written statement from the charity is needed to prove the amount of any donation of money.
For donations of clothing and other household items the deduction amount is normally limited to the item’s fair market value.
Benefit in Return.
Donors who get something in return for their donation may have to reduce their deduction.
Older IRA Owners Have a Different Way to Give
IRA owners, age 70½ or older, can transfer up to $100,000 per year to an eligible charity tax-free.
The type of records a taxpayer needs to keep depends on the amount and type of the donation.
Courtesy of IRS.
For more information contact Neikirk, Mahoney and Smith at 502-896-2999