Charitable Contributions – Tips for Preserving Your Deduction
Choosing the right organization is important. For your donation to be deductible, it must go to a nonprofit group that is approved by the IRS. A political contribution is not deductible.
A receipt or canceled check is needed for all contributions. For donations of $250 or more, you need to obtain a written acknowledgment that notes any benefits or goods that you received in exchange. For a donated car, other motor vehicle, boat, or airplane valued at over $500, you must obtain an acknowledgment on Form 1098-C (or equivalent substitute) that must be attached to your return. For donated items over $5,000, an appraisal is necessary.
Depending on the nature of the organization and the donated property, a deduction ceiling of 60%, 50%, 30%, or 20% of adjusted gross income applies. Where donations in one year exceed the percentage limits, a five-year carryover of the excess may be.
Donating used goods such as clothing, linens, electronics, appliances and furniture gets you a write-off for the item's fair market value at the time you donated it, which may be considerably less than what you originally paid.
The IRS has a helpful booklet on this subject, Publication 561: Determining the Value of Donated Property.
Don't overlook the volunteer work you perform. Although you cannot deduct the value of your services, you can write off out-of-pocket expenses you incur such as materials and supplies. Keep track of your vehicle mileage and include that on your organizer.
Also, keep in mind that you can't write off a contribution to the extent that you get something in return. You must reduce your contribution for the value of what you receive.