Tax Tips for Gifts to Charity

Mark Kennan for Demand Media writes: Tax deductions usually aren't the driving force behind giving money to charity, but if Uncle Sam's offering a tax write-off, you might as well take advantage of it. Your generosity alone isn't enough to reap the maximum tax benefits for your donations, however: to claim any write-offs for charity, you must itemize on your taxes.

TIMING YOUR GIFTS

If you're already itemizing your deductions, you don't have to worry about whether you'll be able to write off your gift. But, if you're not sure that itemizing will be advantageous to you, timing your gifts so that they all occur within the same calendar year may tip the balance, making it worthwhile to itemize your deductions. For example, say your standard deduction is $6,100. If you give $3,000 in December and $3,000 in January, those two deductions have to be taken in different tax years, and the sum of your other itemized deductions might not make it worth itemizing. And, if you don't itemize, you don't get to deduct your giving. But, if you make both donations in either December or January, you count all $6,000 in the same tax year.

TRACKING AND RECEIPTS

If you make small donations throughout the year, keep track as you go and make sure to get receipts from the organizations you donate to. Without a receipt, you're almost never allowed to claim a deduction -- the only exception is for when it's impractical to get one, for example when you leave items at an unattended drop bin. Even then, the exception only applies to gifts under $250. Plus, if you keep a running total, it's a lot easier to know how much you're eligible to write off -- and make sure you're not missing any deductions -- when it comes time to file your taxes.

CHECK THE ORGANIZATION

If you're donating with the expectation of a tax break, make sure you pick a legitimate, qualified charity. Just because there's a need and you give without receiving anything in return doesn't mean you get a tax deduction. For example, if you see a single parent with two kids and give her money for food, you've done a noble deed, but not one that's worthy of a tax deduction. If you're not sure if an organization qualifies, check the IRS database of qualified organizations, which is available online.

CAR DONATIONS

Donating your old car to charity can be a big ticket write-off, not to mention the time and hassle you save when you don't have to sell it yourself. But, how much you can deduct depends on the circumstances. If the charity sells the car to raise money, you're only allowed to deduct the selling price. Yep, that means if your car with a $10,000 blue book value sells for just $3,000, you're only allowed to write off $3,000. But, if the charity uses your car, you get to write off the fair market value, which makes charities that promise to use your car much more attractive for tax purposes.