WEDNESDAY, APRIL 22, 2015
With spring cleaning in full force, you probably have piles of stuff that's ready to be dropped off at the nearest Goodwill. So -- let's discuss charitable donations.
By definition, a charitable donation is a gift made by an individual or an organization to a nonprofit organization, charity or private foundation. Charitable donations are most commonly in the form of cash, but can also be motor vehicles, clothing and other assets (AKA, your old "stuff").
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If you've donated to Goodwill before, you've probably been asked if you need a receipt. And -- if you're like us, you might've been busy, in the midst of a million other errands -- so you politely declined and hurried on your way.
A donation receipt usually includes things such as:
- the date of the donation
- the organization's name
- specific information on the items donated
- the value of the donation
This receipt is very important, because it serves as proof to the Internal Revenue Service (IRS). And charitable donations are tax deductible -- meaning they reduce your taxable income -- as long as they're made to a nonprofit with 501(c) status. You can verify this by asking the organization, or searching the IRS' online database.
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As a general rule of thumb, any donation valued above $250 requires a receipt in order to claim it on your taxes. If your donation exceeds $500, you'll need a receipt and a form for claiming it. So, for example, if you donate your old car, you'll need a receipt and a form from the IRS. A complete list of forms can be found on the IRS website.
The takeaway here? Save those receipts! Come tax time, those donations can add up!
Source: http://www.irs.gov/
Photo credits: Chris Potter, TruckPR.
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