Wednesday, December 7, 2011

CLEAN OUT THE CLOSETS

AND GET A TAX DEDUCTION

If you itemize deductions (the long form) you not only can deduct your cash contributions but you can also deduct your non cash contributions. What we are talking about here is items given to the Salvation Army and the like. Remember the key is Documentation, Documentation, Documentation!

Here are the rules for non cash contributions:

First, make sure that this is a qualified charity. If in doubt ask to see their 501(c) approval.

Remember, no matter how charitable a contribution to an individual may be, contributions to individuals are not deductible.

If the contribution of goods is less than $250 you should have either a written acknowledgment from the charity of some other reliable list.

If the goods have a value between $250 and $500 then you need a written acknowledgement and, of course a list.

If between $500 and $5,000 then written acknowledgement; your list and a file a Form 8283 with the return.

If over $5,000 all of the above and you must file an appraisal with the return.