Giving and Receiving
Tip of the Month
Giving and Receiving
Ever tried to sell your car and find a host of sale and post-sale hassles? Why not just give it a way? If you donate your car to a qualified charitable organization, your can deduct the fair market value of the car from your income tax return. As support for the price you list as the deduction, you can include classified ads showing that your figure is reasonable. If your car is worth more than $500 attach âNon-Cash Charitable Contributions, IRS Publication 8283, to your return. It itâs more that $5,000 you will need to attach the appraisal part of Form 82853 to your return. Donât forget to itemize deduction on Schedule A of your 1040 also.
So you want proof?
It is most wise to save all your receipts, no matter what. But, if you have more that $500 in charitable donations, you must provide documentation for it. Be aware, also, that even though if you make a cash donation, for which receipts are not required, if the IRS questions your contribution, you must provide receipts. Slick, huh?
You can give, but not too much ...
...at least as far as the IRS is concerned. The maximum you are allowed to deduct in charitable contributions is 50% of your Adjusted Gross Income (AGI). But, do not despair, you may carry the amount above the 50% line forward to your next yearâs return. P.S. The 50% rule applies to most but not all charitable organizations. So check your IRS Publication 8283 carefully.
Be aware that, if you contribute more that $250 or more in cash to a charity, the organization that you are contributing to is required to provide you with a written receipt for your donation. And no, a cancelled check is not sufficient for the IRS. Sorry.
These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.