Charitable donation tax deduction
The federal government provides the tax relief to the individuals, who are donating the cash or the valuables for helping the other masses. The aim of providing the benefit would be to honor the worthwhile cause of supporting the less privileged individuals. The charitable donations can be claimed through the itemized deductions module. Many of the elder citizens like to claim for the standard deductions, rather than filing for the itemized deductions, as the elder individuals are also benefited by the additional standard deductions. There are various changes in the regulations of the charitable donations from the year 2007.
Guidelines For Claiming The Maximum Deductions
- Regarding charitable organization The donation should be made to the qualified organizations for claiming the tax relief. The qualified organizations are the institutions which are given the tax exempt status from the Internal Revenue Service. Confirm the status of the charitable trust, before donating any of the valuables or the cash.Read the charitys literature for confirming that the institution is fully recognized by the Internal Revenue Service. Confirm the status of the organization trough the IRS Publication 78, which list down the most qualified organizations. The publication is named as Cumulative List Of Organizations.
- Assigning the value to the goods denoted
- The fair market
value of the household should not be more than the original cost of the
- Generally, if the individual knows, the purchase price of the item, it is advisable to calculate 25 percent of the original purchase price, as the fair value of the goods donated.
- Detailed records of the donated items
- The number of items donated and the condition of the items while donating it to the charitable institutions.
- The purchase date of the item, purchased by the individual.If he is not confirmed over the date, approximate date is also advisable.
- The original purchase price of the item should also be recorded.
- The donor should keep the visual record of the items donated, as it will be helpful in future, if any of the questions arises.
- The signed and dated receipt of the donation is must to be maintained, which is provided to the concerned by the charitable trust.
- All the donations are must to be reported in the Schedule A of the form 1040, for claiming the deductions.
The donor should always remember that the value of the donated items and cash should not be more than 50 percent of the adjusted gross income of the individual. If the donation amount is more than the 50 percent of the adjusted gross income of the individual, he can carry forward the excess amount of donation in the future years.If the individual is donating more than $ 500, as the total value of the donation, he has to fill in the details in the form 8283, with his tax returns. If the claim amount of the deduction is more than $ 5,000, the tax payer has to get an appraisal from the qualified appraiser.The appraisal summary has to be attached to the form 8283, while submitting the tax returns.