Did you make a donation this year? Here are a few tips for claiming it on your tax return.
What’s better than getting a larger tax refund from your tax return? Giving to a good cause.
In fact, WebMD.com’s article “The Science of Good Deeds”, explains that giving to others not only gives something called a ‘helper’s high’, but it also leads to a longer, healthier life.
What’s better than giving to others while also receiving a larger tax refund? Not much.
Before you start spreading some donation love, you’ll want to first make sure you’re going about contributing the right way. Not everything you donate is tax deductible.
Tax Tip #1: Itemize your deductions to claim contributions
If you’re debating between taking the standard deduction or itemizing your deductions, if planning to deduct your charitable contributions you’ll have to pick the ladder.
Luckily, you won’t have to do the calculations by yourself. The RapidTax team will do the hard work for you.
Tax Tip #2: Donate to a ‘qualified charity’
If you planned on giving your mom a car for Christmas and counting it as a deduction on your taxes, you may want to reconsider. In order to deduct a gift, you’ll have to donate to a qualified charity.
Tax Tip #3: The deduction value depends on what you’re giving
Not all contributions translate to a specific deduction amount. It depends on the details of the contribution. For example, if you’re giving property, the deduction amount is based on the fair market value.
If you’re receiving more than a ‘helper’s high’ from your contribution, such as payment or something else in return, you can only deduct the amount of your gift that’s more than the value of what you got in return.
Tax Tip #4: Save ALL records and receipts
You’ll have to save all records that prove your contributions are legitimate. The type of records you’ll need depend on what you donated and it’s value. The record should include the following information:
the amount donated
the name of the charity
the date donated
Tax Tip #5: Donations of $250 require detailed written statements
If your donation was $250 or more in the form of cash or property, you’ll need a written statement from the organization which explains the following:
who the organization is
the amount of the donation
description of any property
whether the organization provided goods or services in exchange for the gift
Deduct your donations on PriorTax
You’ll feel great after donating to an organization in need. That feeling will ripple into the 2015 Tax Season after you see it’s direct affect on your 2014 Taxes!
If you were to report your 2014 Contributions by doing your taxes yourself, you would need to do extra work and fill out additional forms. Rather than trying to calculate it yourself, PriorTax will do all the hard work for you. In fact, you’ll have your 2014 Taxes completed within minutes on PriorTax!
Create an account on PriorTax and prepare your 2014 or any prior year tax return!