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Deducting Your Donations

February 08, 2012 | Comments: 0 | Views: 143

The Charitable Donations deduction category is often under used as well as confusing for people. So let's go over some of the basics of this deduction. The first thing you should know is that you can only deduct donation to specific organizations. The major types of qualified organizations that you can donate to and deduct include organizations that are religious, charitable, educational, scientific, or literary in purpose. That creates a wide window of options for your donations. You can also deduct donations that work to prevent cruelty to children or animals.

When making donations, it is important to make sure that the organization you are donating to is a qualified organization. Every year our tax firm gets clients who ask if giving their neighbor their old baby clothes is a donation or if sending money to their niece who is struggling financially is deductible. Unless you donate through a qualified organization, it is not tax deductible. A charitable organization must be registered as such with the government. If you are not sure, you can ask the organization, and they should be able to provide you with proof of their charitable status. The IRS also provides a list of organizations on their website. If you stick with a church or the more well known organizations you can be sure it is valid donation. Here are some examples of qualified exempt organizations:

1. Churches, synagogues, mosques, temples, etc.

2. Boy Scouts, Boys and Girls Clubs of America, Goodwill, Red Cross, Salvation Army, United Way, etc.

3. Fraternal orders if the gifts are used for the charitable purposes we already mentioned.

4. Veterans and certain cultural groups.

5. Nonprofit schools, hospitals, and organizations whose purpose is to find a cure for or help people who have debilitating defects or diseases.

6. Federal, state, and local governments if the donation is solely for public purposes.

One more thing that you need to know about making donations is what you can donate. There are three mediums you can use to make a donation that is tax deductible.

1. Cash, money, check-any money given to a charitable organization counts as a deduction.

2. Property-for this you would deduct the monetary value of physical items or property.

3. Out of pocket expenses-any money you paid to do volunteer work.

There are many ways to donate and many places to donate to. Most people spend a little if not a lot of money and time on charitable projects. If you spent any money this year on charity, make sure you report it on your taxes and take advantage of this great tax deduction. There's no reason not to.

For more information about how to deduct your donations check out our CD/MP3 "Itemized Deductions & Gabling Winnings" on We cover the donations deduction in greater detail as we well as many other deductions you probably qualify for.

Source: EzineArticles
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