Tnl-News.com - Tips for taxpayers making charitable donations, even to Haiti

Every year, millions of taxpayers itemize their deductions on their federal tax return. One of the most common itemized deductions is a donation made to a charitable organization.

Here are the top 10 things the IRS wants every taxpayer to know before deducting charitable donations.

1. Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization and most will be able to tell you. You can also check IRS Publication 78, which lists most qualified organizations. IRS Publication 78 is available at IRS.gov.

2. Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.

3. You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.

4. If your contribution entitles you to receive merchandise, goods, or services in return, such as admission to a charity banquet or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.

5. Be sure to keep good records of any contribution you make, regardless of the amount. For any contribution made in cash, you must maintain a record of the contribution such as a bank record, including a canceled check or a bank or credit card statement, a written record from the charity containing the date and amount of the contribution and the donor's name, or a payroll deduction record.

6. Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September, but paid the charity only $200 by Dec. 31, your deduction would be $200.

6a. A bill just was signed into law that allows donations made for Haiti earthquake relief between the dates of Jan. 12, 2010 and Feb. 28, of this year, 2010, to be deducted on your 2009 tax return.

7. Include credit card charges and payments by check in the year they are given to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.

8. For any contribution of $250 or more, you must have written acknowledgment from the organization to substantiate your donation. This written proof must include the amount of cash and a description of any property you contributed, and whether the organization provided any goods or services in exchange for the gift.

9. To deduct charitable contributions of items valued at $500 or more you must complete a Form 8283, Non-Cash Charitable Contributions, and attach the form to your return.

10. An appraisal generally must be obtained if you claim a deduction for a contribution of non-cash property worth more than $5,000. In that case, you must also fill out Section B of Form 8283 and attach the form to your return.

A couple items that cause problems every year and warrant mentioning here are raffle tickets, 50/50 drawings, and any similar games of chance. These are considered gambling and are never charitable donations, no matter who is selling them.

Funds designated for a particular person or family, and so on, are gifts to that person. That includes the fundraising functions held by many wonderful individuals and organizations to assist someone who is ill, lost a home, loved one, and so on. A charitable donation, if not given to a qualified organization, does not qualify for a deduction. See #1 above.

For more information contact local Enrolled Agent Alan Jones, at 1144 Andora Road, Carrollton, phone 330-324-1262.

For a list of Enrolled Agents see Ohio State Society of Enrolled Agents Web site at www.ossea.org.