You may have had the best intentions when you made a charitable donation in 2008, but don't expect the IRS to take your word for it. Be prepared to substantiate any amount you claim as a charitable deduction on your 2008 tax return.
First, you must itemize your deductions in order to write off a charitable donation. Then, you must have a receipt for every contribution you claim. It used to be that you only needed a receipt for donations of $250 or more. No more. Now it's no receipt, no deduction -- regardless of the amount. You need a canceled check or other bank record or a written acknowledgment from the charity noting the date and amount of your contribution. Payroll receipts or pledge cards for donations made through payroll deduction are also acceptable proof.
Gone, too, are the days when you could donate your old car to a local charity and claim a deduction for the fair market value. "There was a strong suspicion that people were greatly inflating the value of cars they donated to charity, claiming the top Blue Book price for clunkers that had to be towed away," says Mark Luscombe, principal federal tax analyst for CCH, a tax and accounting information service.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Since 2005, taxpayers who give a car valued at more than $500 to a charity have to meet stringent substantiation requirements. You must obtain a form from the charity that identifies you as the donor and listing your Social Security number and the vehicle identification number. If the charity sells the vehicle without using it or fixing it us -- which is the most common case -- you can only deduct the amount the charity received from the sale. Attach the statement that certifies the sales price to your tax return.
You cans still claim a deduction for donating used clothing or household goods that are in "good condition or better". You should value your donations as they would be priced in a thrift store. Or, you can use a computer program such as "It's Deductible" that is included in TurboTax tax preparation software (which comes with advice from Kiplinger's). It estimates the value for of each donated item and figures the total deduction.
Although you can't deduct the time you devote to a charity, you can deduct the expenses you incurred while contributing your service to a qualified organization, such as driving your car to deliver meals to the home bound. For 2008, you can claim 14 cents per mile for auto expenses related to charitable works.
Sign Up: Get Tax Tips E-mailed to You
Find more deductions with our Taxopedia. Plus see our Tax Center for all the tax information you need.
-
Stock Market Today: Dow Adds 654 Points as 3M Stock Explodes HigherIt was a risk-on day for stocks thanks to an upbeat inflation reading and impressive earnings from 3M and Deckers.
-
3M Leads Dow Stocks After Massive Earnings Beat3M stock is headed toward its best day ever after the industrial conglomerate's impressive earnings report. Here's what you need to know.
-
IRS Ends Inherited IRA Confusion: Annual RMDs Required for ManyIRAs The agency has resolved a major point of uncertainty for inherited IRA beneficiaries.
-
$145 Million in ‘Senior Freeze’ Checks MailedProperty Tax What you need to know about New Jersey's property tax relief program for older adults.
-
TaxAct Class Action Settlement: Details to KnowTax Filing A multimillion-dollar settlement over alleged data privacy violations affects some TaxAct users.
-
An IRA Contribution Option You Might Not KnowIRAs Retirement savings might not have to take a back seat just because your partner doesn't earn income.
-
Project 2025 Tax Overhaul Blueprint: What You Need to KnowTax Proposals Some people wonder what Project 2025 is and what it suggests for taxes.
-
The Taxes That Come out of Your PaycheckPayroll Tax Your take-home pay is often less than expected due to several payroll tax withholdings you need to know.
-
Seven States Where Gas Tax Increased July 1Gas Taxes Since July has arrived, drivers in several states are facing a gas tax hike.
-
401(k) Withdrawal Penalty Rule Changes for 2024Tax Rules More people are taking early emergency withdrawals from retirement savings accounts. New rules might offer some relief.
