One of the most rewarding benefits of tax season is your ability to claim deductions that reduce the amount of taxable income you pay to the IRS. While there are common deductions for home and business owners like property, children, and even education; donations are also types of deductions that can be taken into consideration when filing your taxes.
Do you make regular donations to a nonprofit religious, educational, or charitable group? If so, that would qualify you for additional deductions on your tax return. For more information on how you can go about claiming your donations, call JLW Tax & Bookkeeping Services in Springfield, IL to speak with one of our tax professionals.
What are Charitable Donations?
The first thing you may be wondering is what exactly counts as a charitable donation? Everything from donated cars, clothing, collectibles, artwork, jewelry, property, and of course cash or checks can be considered a charitable donation and claimed on your taxes. However, if you have donated any of these items and accepted a form of payment or trade-in return, this would not be considered an eligible donation. For more information on what counts as a charitable donation call JLW Tax & Bookkeeping Services at (217) 679-1872.
Keep Your Records
To claim a charitable donation on your tax form, you must keep physical proof of your donation as well as the amount of money or value that it is worth. Whether the proof is in the form of a receipt, bank statement, canceled check, or credit card statement, it is required to have some form of payment record for your donation to have it deducted from your taxable income. A written statement from an organization is not enough to be considered a valid record.
What About Item Donations?
While monetary donations are the most common, often certain benefits or organizations wish to receive items instead of money for a specific charity. You may be wondering, are these items eligible to be written off on your taxes? The short answer is, yes! Many individuals donate clothing or household goods to charities all the time and when receiving a record of their donation can receive a reduction on their taxable income. Certain rules do apply for vehicles where their worth is much more difficult to appraise.
Does Volunteer Work Count?
When you think of a donation, volunteer work isn’t always the first thing individuals think of, in fact, many forget that volunteering their time is a donation that can be deducted from their taxes. Let us explain! If the organization you volunteered for is qualified under the IRS, any mileage, parking, toll, or housing expenses that are involved can be deducted from your income by a tax professional. The only thing you cannot write off is the value of your time and services, which cannot be measured numerically.
