TaxConnections Tax Blog - Charitible Organizations and taxes“O” is for organizations.  There are many kinds of organizations, but they can be handled in very different ways for tax purposes.  Charitable organizations are tax-exempt and contributions to those organizations are deductible for taxpayers.  How can you tell if an organization qualifies as tax exempt?  Everyone knows the United Way is a qualified charitable organization, but what about the Wayzata Orchestra Boosters?  Many booster clubs are set up as charitable organizations, but others are not.  It turns out the Wayzata Orchestra Boosters is a qualified public charity, meaning contributions to that organization are deductible.  So where can you look that up?

http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check

That link is the Internal Revenue Service site where you can search by name and state for a charitable organization.  Before you make any large charitable contributions, it might be worth checking them out to make sure they are legitimate charities.

It is especially important to check the tax-exempt status of political organizations.  Some are organized for the benefit of candidates and a contribution to those organizations is not tax-deductible.  Others may seem political but they are organized and run as a charitable organization on behalf of a specific issue instead of a specific candidate or party.  Some of those organizations could be receiving tax deductible contributions.  The best thing to do is go the IRS site and check them out.  Better safe than sorry when donating to organizations.

Taxes A to Z – still randomly meandering through tax topics, but at least for 26 posts in an alphabetical order.

In accordance with Circular 230 Disclosure

The IRS often puts charitable deductions under the microscope. This area has been ripe for abuse in the past, but the rules for establishing and documenting gifts to charity were recently tightened. As the deadline for filing 2012 returns fast approaches, the IRS is reminding taxpayers and practitioners about these requirements by posting nine tips for securing charitable deductions.

1. To qualify for a deduction, a taxpayer must make the donation to a qualified charitable organization. You can’t deduct contributions you make to an individual, a political organization, or a political candidate.

2. Taxpayers must file Form 1040 and itemize deductions on Schedule A. If the total deduction for all non-cash contributions for the year is more than $500, taxpayers must also file Form 8283, Non-cash Charitable Contributions, with their tax return.

3. If you receive a benefit of some kind in return for your contribution, you can only deduct the amount that exceeds the fair market value of the benefit you received. Examples of benefits that may be received in return for a contribution include merchandise, tickets to an event, or other goods and services.

What’s It Really Worth?

Generally, a taxpayer may deduct the fair market value of property donated to charity if he or she has held it longer Read More