You can deduct CONTRIBUTIONS or GIFTS that you
give to organizations approved by the IRS!  You may
deduct cash donations or property donations; such
as a car, furniture, or clothing!




Charitable Donation


You may deduct donations that you give to organizations that are religious,
charitable, educational, scientific, or literary in purpose.  You may also
deduct what you give to organizations that work to prevent the cruelty to
children or animals. 


Cash Donation Tax Limit
You can deduct your cash donations up to 50% of your adjusted gross
income (AGI) if you itemize your deductions.  There is no dollar limit on
your annual deduction; you are only limited by your AGI.

Donations in excess of 50% of your AGI can be carried forward for up to
5 years.

Example:  Joaquin Guerrero has an AGI of $40,000.  He may deduct cash
donations of only $20,000.  If he donates above the $20,000 limit, $26,000 for
example, he can deduct $20,000 in 2007 and carry the excess $6,000 forward
to 2008.

Year-End Tax Deduction
You deduct charitable donations on your tax return field for the year in which
you paid them in cash or property.  A contribution by check is deductible in the
year you give the check, even if it is cashed in the following year.

Example:  Matt Cherrie writes a check to the Red Cross on December 31, 2007
as a charitable donation in the amount of $100.  The $100 is deductible in 2007. 

A postdated check with a 2007 date is not deductible until 2008. 

Contributions by your credit card are deductible in the year you charge them,
not in the year you pay your credit card bill.  If you charge your donation or gift
by December 31, 2007, the donation is deductible in 2007 even though you pay
the credit card company in 2008. 

Cash Donations of $250 or More
You may deduct a gift of $250 or more only if you have a statement from the
charitable organization showing the information in:

  1. The amount of any money contributed and a description (but not value)
    of any property donated.
     
  2. Whether the organization did or did not give you any goods or services
    in return for your contribution.  If you did receive any goods or services,
    a description and estimate of the value must be included.  If you received
    only intangible religious benefits (such as admission to a religious
    ceremony), the organization must state this, but it does not have to
    describe or value the benefit.

Note that if you make several smaller gifts to one charity throughout the year,
they are not totaled up to the $250 limit.  Each charitable donation stands
alone (unless you intentionally make donations to avoid the dollar limit).

Example:  Greg Raney donates $200 each month to his local church.  Greg
does not need any acknowledgement from the church to claim his total
deduction of $2,400. 



Contributions You Cannot Deduct

  • A contribution to a specific individual. 
     
  • Travel expenses (including meals and lodging) while away from
    home, unless there was no significant element of personal pleasure,
    recreation, or vacation in the travel.
     
  • Political contributions.
     
  • Dues, fees, or bills paid to country clubs, lodges, fraternities, sororities,
    or similar groups.
     
  • Cost of raffle, bingo, or lottery tickets.
     
  • Value of your time or services.
     
  • Gifts to individuals and groups that are run for personal profit.
     
  • Gifts to groups whose purpose is to lobby for changes in the laws.
     
  • Gifts to civic leagues, social and sports clubs, labor unions, and
    chambers of commerce
     
  • Your personal expenses.


Property Charitable Donations
You are allowed to donate property, such as clothing or furniture, at their
fair market value at the time you donated them.  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.

Property Donation Requirements

  1. The property must be held "long term" (described below).
  2. If the property is tangible personal property (ie cars, equipment, etc..) the
    charity must put the property to use in its exempt purpose.
  3. The property cannot be "ordinary income property".
  4. You must comply with "substantiation requirement"; property donated
    in excess of $500 (described below).

Property Donation Holding Period
You must own have owned the property that you are donating for more than
one year prior to the date of your donation.


Property Donations of $500 or More
If the amount of your deduction is more than $500, you must attach Form 8283,
Noncash Charitable Contributions, to your tax return. 

If you make a donation exceeding $5,000, you must obtain a written appraisal
for your donation.  The appraisal is summarized on the form.



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