.png?width=190&height=122&name=Summit-Virtual-CFO_color_rgb%20(1).png "Summit-Virtual-CFO_color_rgb (1)")
Are you are considering a charitable gift by the end of the year? Do you know that you can help out a worthy cause and reduce your 2016 tax bill at the same time? Here are some tips that may help you get the full benefit by itemizing your deductions.
* Charitable donations. Usually, when you make a donation to a qualified charitable organization, you can deduct the full amount of your donation up to 50% of your adjusted gross income for the year. If your donation was a large one, you may be able to carry the excess forward for five years.
* Written acknowledgment. Charitable monetary donations of $250 or more, must have a written acknowledgment from that charity. A monetary donation using your credit card that is posted to your account this year, is deductible even as late as December 31st. Even though you won’t pay the bill until 2017, you can take the deduction on your 2016 tax return.
* Gift of time. You cannot deduct the value of your “volunteered services". However, you can deduct your out of pocket expenses spent on behalf of the charity. Examples include: your local transportation, long-distance travel, and lodging.
* Property gifts. Usually, the annual deduction for a property is 30% of your adjusted gross income. You can carry the remainder forward for five years. If you donate appreciated property that you’ve owned for more than one year, you can deduct the property’s fair market value, in most cases. You will need an independent appraisal for gifts over $5,000.
* Claiming the full property deduction. In order to claim the full deduction, the gift must be used to further the charity’s tax-exempt mission. For example, if you donate a painting to your alma mater, it must be displayed where students can study it.
* Goods for Service. When you make a gift of more than $75 that entitles you to receive goods or services in return, the charity must provide a good faith estimate of the goods or services received and the amount of payment exceeding the value of the gift. You can deduct the portion that exceeds the fair market value.
At Summit CPA we offer multiple resources to assist you with all of your tax and financial planning needs. Contact our office at (855) 977-7623 to schedule an appointment with our advisors.
Leave a comment