The title of the blog today comes from an understanding that people should be donating to charity because it feels good. They want to help people less fortunate than themselves. The fact that you can get a deduction on Schedule A of your Federal taxes is a nice encouragement but the act of charity should be done because you feel like giving something to somebody who needs it be it cash, an automobile, clothing or food.
The IRS mandates that any cash contribution to a recognized charity (and you can check this blog or the IRS site for references to what a recognized charity is) must be documented with a cancelled check or a credit card statement showing the payment. You will also need a letter from the charity thanking you for the donation showing the amount that you gave.
Too many people over the years have donated crappy items to the Salvation Army and they basically burnt the boats for all of us in terms of trying to donate goods to charities. You still can give, but if you are doing it for tax reasons, I suggest you take the salvage value unless you are donating a Van Gogh or something that can be appraised as an antique. You will need the letter at tax time and the charity will have to show that it is using or disposing of the gift for the value that you are claiming it for. If it turns out they sell it at the curb for $23.15, that is what you will get as the amount for your deduction. Cruel, but generally true. If anybody has experienced anything differently, please let me know.
So remember that when charity is beginning at home, it will end with you collecting whatever receipts you can and keeping good documentation!
Kim Greenblatt
You are reading Kim Greenblatt’s blog, profitable and realizing that at tax time, charity begins at home!
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