Charitable Organizations
Qualified charitable organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals.
Expenses Incurred While Volunteering
Out-of-pocket expenses incurred in performing volunteer work for a charitable organization (including the charitable mileage deduction) are considered cash contributions. The value of a donor’s time is not deductible.
Read the entire communication here Charitable Contributions Guide
Contributions That Benefit the Taxpayer
If a taxpayer receives a benefit in exchange for a charitable contribution, the deduction is reduced by the value of the benefit received.
Example: Paul made a $70 donation to Public TV and received a $40 CD of his all-time favorite band, Herman’s Hermits, in appreciation for his donation. His deduction equals $30.
Auto Expenses
Deductible out-of-pocket expenses include the cost of using the taxpayer’s auto in providing services for a charitable organization. Deduct the actual cost of gas and oil or the standard mileage rate. Add parking and tolls to amount claimed for either standard mileage rate or actual expenses. A mileage log is required.
Read the entire communication here Charitable Contributions Guide
Standard Mileage Rate
The general standard mileage rate for charity is 14¢ per mile in 2014.
Contributions of Property
If used items were given to charity, such as clothing or furniture, the fair market value of the items is used to determine the deductible amount. Fair market value is what a willing buyer would pay a willing seller when neither has to buy or sell and both are aware of the conditions of the sale.
Planning Tip: Most cell phones today can take pictures. Take a picture of all items donated. Keep the electronic pictures for proof the items were in good used condition or better at the time they were donated.
Note: No deduction is allowed for a charitable contribution of clothing or household items unless the clothing or household item is in good used condition or better. The IRS is authorized by regulation to deny a deduction for any contribution of clothing or a household item that has minimal monetary value, such as used socks and undergarments.
Read the entire communication here Charitable Contributions Guide
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