DALLAS — The spirit of giving seems to grow during the holiday season, and many donations are made to charitable causes at this special time of year. The IRS reminded taxpayers today to keep some important points in mind when making donations with the expectation of deducting them on a federal tax return.
You can deduct donations only if you make them to a qualified organization. Most organizations other than churches and governments must apply to the IRS to become qualified.
“Search for many charitable organizations online at IRS.gov with Publication 78,” said Clay Sanford, an IRS spokesman in Dallas. “Otherwise, a contributor can ask the organization for a copy of its exemption letter, which states the Code section that describes the organization and whether contributions made to the organization are deductible.”
Qualified organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals.
Sanford added that it is necessary to file Form 1040 and itemize deductions on Schedule A.
This deduction is not available to people who choose the standard deduction, including anyone who files a short form (1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceeds the standard deduction.
Be sure to keep good records, too.
“There are recordkeeping requirements for cash contributions regardless of the amount,” Sanford noted. “Remember to keep a written communication from the charity with the name of the charity, date and amount of the contribution or a bank record--canceled checks will work, or bank statements containing the name of the charity, the date and amount.”
More information about charitable donations can be found in IRS Publication 526, available online at IRS.gov, or have it mailed to you by calling, toll-free, 1-800-TAX-FORM.