During the holiday season, people often donate money, personal belongings or property to charity. Here are some tips that you can share with your clients to help them file their tax return.
Qualified Charities: The client can deduct gifts for a qualified charity. This includes churches, synagogues, temples, mosques and government agencies, even if they do not appear on the Select Check tool provided by the IRS. Note: Warn them to be careful of phishers posing as qualifying charities. Do not open emails from a “charity” that is not familiar, and do not click on any links in the emails. The Select Check tool should be able to help you confirm actual charities.
Keep Records of All Cash Gifts: Gifts of money include those made in cash, checks, electronic funds transfer, credit card or payroll deductions. Make sure they ask for written statements or bank records from the charity. The statement must show the name of the charity, date and the contribution amount. If there are payroll deductions, have them retain a paystub or W-2 form from their employer.
Additional Records: The client needs to get an acknowledgement from the charity for each deductible donation, cash or property, of $250 or more.
Year-End Gifts: Deduct contributions in the year that they are made. If the client charges a gift to a credit card before the end of the year, it will count for 2016. The same is true of a check mailed in 2016.
Special Rules: If they give a car, boat or airplane to charity, special rules apply. Be sure they fill out Form 8283 Noncash Charitable Contributions, to report these gifts.
For more information about charitable donations, please visit
https://www.irs.gov/uac/about-publication-526 or call the IRS at 1-800-829-1040.