Overlooked Charitable Contributions tax deductions
Listed below are some frequently overlooked tax deductions that might help reduce your tax bill. Please remember that whenever we talk about taxes, the following caveats apply: “It depends,” and “these deductions may not apply to all taxpayers.”
If you have any questions about these or any other tax-related matters give us a call.
I. Charitable contributions: In addition to the usual cash donations that you have made throughout the year, you may be able to deduct the cost of using your vehicle if you volunteer your time or provide a service to a qualified charitable, educational or nonprofit organization.
There are two options available for claiming vehicle expenses and, naturally, the IRS requires you to have “reliable written records” for either method:
To use the standard charitable mileage rate per mile, your records must show:
- the name of the organization,
- the dates you drove your car for your charitable work and
- the number of miles driven.
To use the actual vehicle expenses, your records must show the costs of operating your vehicle that directly relate to your volunteer work.
You can also deduct parking fees and tolls regardless of which method is used.
II. Additionally, money spent out of your own pocket within the scope of volunteer work may be deductible. These expenses might include office supplies, uniforms, and even travel expenses if you were away from home while performing your charitable service. Documentation requirements for out-of-pocket expenses are:
- You must have “adequate records” to prove the amount of the expenses.
- Obtain an acknowledgement from the organization before you file your tax return that contains a:
- description of the services you provided
- a statement that says you were not reimbursed for the expenses, and that you receive no tangible (other than religious) benefit from the organization.
III. Non-cash contributions: In recent years the IRS has stiffened the required documentation for donations of clothing and other household items to nonprofit organizations like the Salvation Army or the Goodwill Industries. “Three bags of clothing” or “Two boxes of books” is not an adequate description of the donated items to claim the deduction. You must have:
- A list of the donated items along with their fair market value
- And some form of receipt or acknowledgement from the organization.
Here are a few handy websites to help you evaluate your non-cash items:
You can download an evaluation guide from the yellow box in the middle of this Goodwill Industries web page:
This Usedprice.com link contains Blue Book valuations for different categories of noncash donations from television sets and computers to guns, musical instruments, power tools and more:
For Church related Donation questions and how best to handle these issues, contact us to view our Church Treasurers Toolkit video.