Times are tough all over, especially for charities that depend on the kindness of strangers who may be feeling a bit pinched themselves.
So if you’re able to fund a favorite cause this year, make sure you make the most of your gift by getting a receipt for every donation. Prior to 2007, you needed a receipt only for gifts of $250 or more. Now you need a receipt for everything. And remember, to claim a charitable deduction, you must itemize and you must make your contributions by December 31.
When you’re cleaning out your closets in search of year-end donations, keep in mind that used clothing and household items must be in good condition to qualify for a deduction. Single items valued at $5,000 or more, regardless of condition, require a written appraisal.
In most cases, tax deductions for donated cars, trucks and boats are limited to the amount the charity receives from the sale of the vehicle and requires a written acknowledgment from the charity.
There is an exception that allows you to claim a larger deduction for a donated vehicle. If the organization regularly uses the vehicle to perform charitable activities, such as delivering meals, or if it gives or sells the vehicle to someone in need for substantially less than it is worth, you can deduct the car’s fair market value. Make sure you get a receipt form the charity substantiating your donation on IRS form 1098-C.