Can I deduct contributions to charities? What charitable contributions are deductible? These are common questions an individual taxpayer may ask their tax accountant or tax attorney. The article below has been drafted by a Denver tax attorney at The McGuire Law Firm to provide some information regarding charitable contributions.
Gifting to charities can be a great way to obtain a tax deduction on your 1040 individual income tax return. The gift or donation must be to a qualified charity if you want to deduct the gift. Gifts given to individuals, politicians and certain organizations cannot be deducted on your tax return.
To deduct the gift, you must file a 1040 individual income tax return and be able to itemize your deductions on a Schedule A. If you cannot itemize your deductions or would not want to because the standard deduction js greater than your itemized deductions, the gift would not be deducted on your tax return. The deduction can also be limited if you receive any benefit for your contributions. You can only deduct the amount of the gift you gave that is in excess of any benefit you may have received for making the gift.
When gifting, if you gift property, the amount you can deduct is generally the fair market value of the property at the time of the gift. Fair market value can be defined as the amount a willing buyer would pay and a will seller would receive in an arm’s length transaction for the property, on an open market.
If you are deducting more than $500 for non cash gifts, you need to file Form 8283 with your 1040 individual income tax return. You also must keep records to verify and prove the contributions you have made during the taxable year in which are deducting the gifts or contributions on your 1040 individual income tax return.
If claiming a deduction for cash or property of $250 or more, you will need a written statement from the organization of which you made the donation. The statement must show the amount you donated and a description of the property. The statement must also provide information as to any goods, services or benefits you received in return for donating the property.
You can speak with a Denver tax attorney at The McGuire Law Firm regarding any tax questions or issues that you have. A tax attorney can assist you with many tax matters from personal tax planning to business issues and tax planning.
Contact the McGuire Law Firm to schedule your free consultation with a tax attorney. Offices in Denver, Colorado and Golden, Colorado.