Charitable donations are a great way to get even more deductions on your tax return this year. Many resale shops are doing a large amount of business due to those savvy shoppers trying to save some money by purchasing second hand.
You are able to deduct items you donated at fair market value on your tax return. This will eliminate your tax liability dollar for dollar. In order to follow all IRS guideline you must do the following when donating:
- Itemize all items donated
- Donated to a legitimate charity
- You must have a receipt from the charity
It is a good idea to track all donations throughout the year to ensure you are getting the most tax savings possible. You must itemize using form 1040 and Schedule A. If your amount of items donated exceeds $500.00 then you will have to use form 8283 to itemize all of your noncash charitable contributions. If you decide to take the standard deduction on your return then you will not see a tax savings from your charitable donations.
Donʼt forget those often overlooked deductions such as, miles driven for a charitable cause or tickets you may have purchase to attend a charity event. The IRS offers a complete list of exempt organizations to make sure you are donating to a legitimate charity.
There are many online tax preparing websites that offer help with itemizing your charitable donations. For example, TurboTax offers a new program called Itʼs Deductible that will help you track your donations throughout the entire year as well as offering tools to help you find the fair market value of your donated goods.
To learn more about Itʼs Deductible please visit TurboTax Online. TurboTax Online will help you meet all of the IRS requirements to get the largest deduction possible.