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Year-End Charitable Planning Tips, Part 2

It isn't too late to make tax deductible contributions to your favorite charity for 2012.  Some tips offered by the IRS will help you make sure you are entitled to the deduction you claim and keep the correct records to prove it.

Contributions are deductible in the year made.  Thus, donations charged to a credit card before the end of 2012 count for 2012.  This is true even if the credit card bill isn't paid until 2013.  Also, donations made by check count for 2012 as long as they are mailed in 2012.

Confirm that the organization is qualified.  Only donations to qualified organizations are tax-deductible.  A searchable online database ("Exempt Organization Select Check") is available on the IRS web site and lists most organizations that are qualified to receive deductible contributions.  In addition, churches, synagogues, temples, mosques, and government agencies are eligible to receive deductible donations, even if they are not listed in the database.

For individuals, you can only claim deductions for charitable contributions if you itemize your deductions on Schedule A of Form 1040.  This deduction is not available to individuals who choose the standard deduction, including anyone who files a short form (i.e., Form 1040A or 1040EZ).  A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceed the standard deduction.  Use the 2012 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.

For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property.  If a donation is left at a charity's unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value.  Additional rules apply for a contribution of $250 or more.

The deduction for a motor vehicle, boat, or airplane donated to charity is usually limited to the gross proceeds from its sale.  This rule applies if the claimed value is more than $500.  Form 1098-C, or a similar statement, must be provided to the donor by the organization and attached to the donor's tax return.

Lastly, if the amount of your claimed deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.  For more information, see IRS Publication 526.

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