Your Charitable Donations to FieldHaven
By Roger Carroll, CPA, Treasurer FieldHaven Board of Directors
A number of changes were made to the tax laws relating to charitable contributions, beginning on January 1, 2007. The two most relevant are discussed below: Deductions of Clothing and Household items are now limited to $500 and must be in usable condition – don’t give us your broken washing machine: we don’t want to have to fix it and you can’t deduct it! Should you happen to have a usable item worth more than $500 that you want to donate, you will need to have a “qualified appraisal” of the items value before you donate it for it to be deductible.
No deduction is allowable for any monetary gifts (cash or check) without documentation. This goes all the way down to buying cookies from the child next door. Allowable documentation includes a cancelled check with the related bank statement, or a receipt or written communication from the recipient organization. Self-created (by the taxpayer) documentation is not acceptable.
Here are some basic rules of contributions:
- Charitable contributions are deducted in the year they were made, even if made by credit card.
- Charitable contributions by individuals are only deductible if they itemize their deductions on Schedule A of form 1040.
If you choose the standard deduction, contributions are not deductible.
- Donated time is not deductible, but the miles of travel for charitable purposes are.
- Vehicle, motor boat and airplane donations are limited to the gross proceeds of the sale of the vehicle. In the past, one could deduct the appraised or “Blue Book” value of the vehicle. This is no longer allowed.
- Just in case you wanted to know, you can donate up to 50% of your annual income to qualifying organizations. If you donate more, you can “carry-over” the non-deducted amount to deduct in future years.
Deductions are only allowed if made to Qualified Charities. To find out whether a charity is registered or not, click here, at the Registry of Charitable Trust, and search for the charity’s name. You can see information about the organization, and the annual tax forms filed.