To reduce one’s taxable income, it is possible to make charitable donations, the value of which is completely tax deductable. To make this claim, the tax return must be itemized, and the charitable donation must meet certain conditions.
The rules for claiming a deduction for charitable donation:
* A pledge is not a payment; a payment in cash or property must actually be made
* Your donation must be made to a charity that is qualified as tax-exempt
* Your tax return must be itemized
* Your records must include any cancelled checks, letters acknowledging the donation and copies of the charitable donation appraisal in Minnesota
The records that you keep are very important, and they must be thorough, complete and detailed. The pension protection act demands that written records be kept of any and all cash donations; the record must indicate the name of the charity, the date you made the donation and the amount donated. All of this information appears on a check so it is highly recommended the donation be in the form of a check. If your bank statements or credit card statements indicate that you made a donation via direct debit or through your credit card, the statements are ample evidence as well.
Normally, the charity will write a letter acknowledging their receipt of the donation; these letters should also become a part of your permanent records. In the event you are audited by the IRS, any donation not supported by an acknowledgment letter that are in an amount greater than $250 can be disallowed as a tax deduction. If you contribute multiple times to the same charity, it is important that each donation be acknowledged separately.
Donations in kind:
Contributions other than cash are welcomed by most charities; they too are subject to stringent record keeping. You have to be in a position to support the fair market value that is declared on your tax return; this is the document provided when you get an independent charitable donation appraisal in Minnesota.
Automobile contributions:
If a car, truck, bus, boat, aircraft or any other form of conveyance is donated, and it is worth more than $500, it too must be appraised and an acknowledgement from the charity must be part of your claim.
Any non-cash donation, regardless of what it is, if worth more than $5,000 must be subjected to a charitable donation appraisal in Minnesota.
Contributions that are made to a number of organizations are not tax deductable. The list is quite long but includes political parties, political action campaigns, donations made to individual people, fees paid and the value of your time rendered for services to the charity.
In most cases, if your donation is supported by a document given when you get a charitable donation appraisal in Minnesota, it will be accepted by the IRS.
A charitable donation appraisal in Minnesota is available as one of the services offered by History Bound in Mendota MN. Their appraisers are all licensed and insured.