Sacramento CPA, Tax, Accounting, Bookkeeping
Charitable Contributions for 2009
When a taxpayer donates clothing and household items to a charity, they must have a receipt in order to claim the tax deduction on their tax return. If the total contribution is greater than $500, the taxpayer must file a separate tax form. The tax form is 8283, Noncash Charitable Contributions.
Taxpayers can value their donations at the Salvation Army website www.salvationarmyusa.org or Goodwill’s website www.goodwill.org by searching for the work valuation. The tax value may appear low assuming the item was recently bought, however, the values are based on what the organization will actually charge for it in their store.
Record Substantiation
Cash donations less than $250:
To claim a tax deduction for cash donations less than $250, the taxpayer will need a bank record that includes a cancelled check or a credit card statement showing the name and transaction date. If the taxpayer has a payroll deduction, you would need your W-2 wage statement or other documentation furnished by the employer.
Cash donations greater than $250:
To claim a tax deduction for cash donations greater than $250, the taxpayer will need written documentation from the charity that shows the date, amount contributed and a description of the contribution.
Noncash donations less than $250:
To claim a tax deduction for noncash donations less than $250, the taxpayer will need a receipt from the organization.
Noncash donations greater than $250 but less than $500:
To claim a tax deduction for noncash donations greater than $250 but less than $500, the taxpayer will need written documentation from the organization that shows the name of charity, date, amount paid, and the description of the donation.
Noncash donations greater than $500 but less than $5000:
To claim a tax deduction for noncash donations greater than $500 but less than $5000, the taxpayer will need written documentation from the organization plus how they obtained the property, the date acquired, and the amount paid.
Donations greater than $5,000:
To claim a tax deduction for noncash donations greater than $5,000, the taxpayer will need and appraisal which is required to be attached to the tax return.
Donation of Art valued at greater than $20,000:
To claim a tax deduction for art greater than $20,000, the taxpayer will need a signed appraisal and photograph which is required to be attached to the tax return.
Publicly traded stock:
To claim a tax deduction for publicly traded stock of a corporation, no appraisal is required if market quotes are available as of the date of the contribution.
Non-publicly traded stock:
To claim a tax deduction for non-publicly traded stock greater than $5,000 but less than or equal to $10,000, a partially completed appraisal summary must be completed. If the stock is greater than $10,000, a complete appraisal must be attached to the tax return.