Richard Lipton, founder of Lipton CPA & Associates, says if you make charitable donations and want to claim a tax deduction for your gifts, you must itemize your deductions. He offers the following tips for giving business gifts to charity:
- Qualified charities. You can only deduct gifts you give to qualified charities. This can include churches, synagogues, temples, mosques and government agencies, but they must be qualified charities.
- Monetary donations. Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return, regardless of the amount of the gift. The statement must show the name of the charity and the date and amount of the contribution. Bank records include canceled checks, or bank, credit union and credit card statements.
- Household goods. Household items include furniture, furnishings, electronics, appliances and linens. If you donate clothing and household items to charity, they generally must be in at least good used condition to claim a tax deduction. If you claim a deduction of over $500 for an item, it doesn’t have to meet this standard if you include a qualified appraisal of the item with your tax return.
- Records required. You must get an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more. Additional rules apply to the statement for gifts of that amount. This statement is in addition to the records required for deducting cash gifts. However, one statement with all of the required information may meet both requirements.
- Year-end gifts. You can deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for that year.
- Special rules. Special rules apply if you give a car, boat or airplane to charity. Check with your accountant for details.
Article courtesy of TIRE REVIEW.