5 Ways to Make Donations Count at Tax Time

A charitable donation can make a difference, not only for the organization you support but also for your tax burden. The tax benefit usually factors in for most people when making charitable donations but Broussard Poché, LLP wants you to remember, it’s important to follow the rules.

Here are a few tips for making your donation count:

  1. Itemize: To claim a charitable deduction on your tax return, you must itemize your deductions. Make sure you have a Schedule A on your federal form 1040; use lines 16-19 to note each item.
  1. Be Picky: Only donations to qualified charitable organizations are deductible. You can verify by asking the organization to see their letter from the IRS. Most organizations will have this information available on-line. Churches, synagogues, temples and mosques are considered charitable organizations and can receive deductible donations without a letter.
  1. Get a Receipt: This one is important. Even get a receipt if you are donating cash. The receipt must include the date, the amount and the organization that received the donation.
  1. The Date Matters: Contributions are deductible only in the year you made them; gifts must be made and paid by December 31.
  2. May Need A Letter: Generally, for donations over $250 of either cash or property the IRS requires a special receipt/letter from the charity. The “letter of acknowledgement” must have the following elements: It must be written, the amount of cash and/or description of property donated, if you received any goods or services, as well as a good faith estimate of their value, received as a result of the donation, or if applicable, a statement that the only benefits received were intangible religious benefits.

If charitable donations are part of your yearly financial habits, you may want to check with your tax professional, just to make sure you are following all of the rules. It’s easy to miss a step, especially with many small donations made over the course of one year. If you need any advice, please contact one of our experts at Broussard Poché, LLP, we can help you stay on track.