Charitable Donations and How These Affect You at Tax Time

Did you donate old clothes, furniture, vehicles, or other property to charity in the past year?  If so, you might be pleased to learn that this can come in very handy when it is time to file your taxes

 

While donations to individuals do not count on your taxes, any donations made to a qualified charity organization can be deducted.  If you have collected receipts or statements from your donations or gathered a form 1098-C if you donated a vehicle, you can deduct these donations from your taxes at filing time.

Providing documentation is especially important any time the value of donated funds or goods exceed $500.  Most charities will have forms that they will provide you if you have made a large donation or if you request one for even a smaller donation.  Taking the time to collect and save these forms can prove to be highly worthwhile when you are ready to file your taxes, and may greatly increase your refund or reduce the amount that you owe.

Learning all of the rules and by-laws in terms of tax deductible donations can be helpful, especially if you are donating a vehicle, but the bottom line is that you can deduct these things.  There is a separate section on all 1040 forms for charitable donations where you will be able to enter the fair market value or resell value for the items you donated. 

With the right donations each year, you can help a number of great causes while also lightening your own taxes.

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