Tuesday, February 2, 2016

How to Itemize Charitable Donations

You can claim all charitable contributions of money and property donated to qualified organizations only if you itemize your deductions. Itemizing can allow you to reduce your taxable income, lower your tax bill and maximize your refund. If you have other deductions, like mortgage interest, property taxes, school taxes, bank interest and medical expenses, it usually makes sense to choose this option. Only itemize deductions when these write offs total more than the standard deduction.


1. Make certain you retain all your charitable donation receipts and canceled checks for the entire year.
  • Put all the charitable receipts in a file, envelope or folder for safekeeping. You will need these receipts to prepare your tax return. If the IRS decides to audit your account, you will need these records to prove the validity of your deductions.
  • Organize all your receipts by charity. For example, if you have made several donations throughout the year to one organization like Good Will or the Salvation Army, clip those receipts together.
  • Arrange each of your charity receipts in order of date. Start with January 1, placing the others behind it until you reach December 31.

2. Download a complete set of instructions and forms from the official IRS website. The required forms for reporting charitable donations are Federal 1040 and Schedule A.


3. Itemize your charitable donations on the forms.
  • Record all charitable contributions in the "Gifts to Charity" section of Schedule A. On most forms, you'll find this on lines 16, 17 and 18.
  • Total the amounts of each line and enter this amount on line 19 of Schedule A, or the section for the total amount you are deducting under "Gifts to Charity."
  • Copy the amount of your total tax deductions from line 19 on Schedule A to line 40a of your 1040. You'll want to verify that this is the line for the total amount of your itemized deductions.

4. Retain a copy of your federal and state tax returns for your files.

source : http://www.wikihow.com/Itemize-Charitable-Donations

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