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Filing Tax Deductions due to Charity Giving

 

Donating to charity is another way to get more deductions in filing your taxes. Most Americans donate to charity to fulfill their charity duties as well as increasing the deductions for their taxes. What you need to learn is about how you can donate, where you can donate and how to determine how much deductions you can make.

Fair Market Value is one of the important things you need to familiarize yourself with when you plan to donate and use it as tax deductions. The value of the item at the time you donated is called the fair market value. You would get a retail price of the item but instead will get the fair market value of it once donated. You have to remember that you also have to donate to charitable organizations that are deemed qualified by the IRS.

Reporting your itemized donations must be done with an utmost care, because IRS requires a detailed itemized donations and its fair market value being checked if you have declared it correctly. Reporting your tax donations you would need to do the following: Fill out the Schedule A Form I040, Track donations with a log along with dates and amounts as well as its fair market value. Keep in mind that if your donation exceeds $500 then you will also need to complete the Form 8283.

Another thing is that you have to keep an itemized list of the donations made every time you donate. When making donations, keep in mind of the following items that you can donate Cash or Property and Vehicles, clothes, toys, food and other things the qualified charity needs. As long as you keep track of your non cash donations, you can file them for tax deductions. Keep in mind that you cannot receive any benefit from the donations you’ve made.

Also, Church donations will need a copy of the receipts of the donations, since IRs would need to see that as well. Anything like mileage return from the charity must also be indicated on your tax deductions because IRS would definitely look for that and validate all information needed. The key is to be as detailed as possible, keep a clean record and honest record of all your receipts and documents to present to the IRS. There are various websites; you can check out to help you in filing your taxes and itemizing your donations.

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