Time is running out to make charitable contributions that can be claimed on your 2014 tax returns. IRS spokesman, Bill Brunson, says you have to do so by midnight on December 31st.
“And these can be either in cash or non-cash contributions to a qualified charity that the IRS recognizes,” Brunson says. “And to find out if that charity that you are going to gift to is recognized as an exempt organization by the IRS, folks can go to www.irs.gov and use the select-check tool, by keying in the name of the organization, and the IRS will then tell you if it is currently recognized as an exempt organization or not.”
Brunson says you have to have paperwork proving your donation. “If you gift cash, you need to get a record for any amount. If you gift non-cash items, if the value of those items is in excess of $250, then you should get a written receipt also,” Brunson says. He says there are cases where you can keep track of non-cash items and still claim them. Brunson says if you were to drop off items at a charity after they have closed, you need to write down the items and that record will be acceptable to the IRS is it includes, the date, time and the items you are giving.
Non-cash items such as clothing and household items must be in good used condition or better to be deductible. Brunson says donations paid by credit card or check can be deducted on your 2014 taxes even if the organization does not process them until 2015. “You are able to claim it on your 2014 return, but once again, you have to take that action before midnight December 31st,” according to Brunson.
There are also ways to put off paying taxes until a later date. “People have the ability to defer tax on monies that they earn by putting them in a qualified pension fund or an individual retirement arrangement,”Brunson says. “You must make your contributions to your qualified pension fund for it to be reflected on your 2014 statement.”
The one important things to remember is you need proof of what you have done to go along with your return. “Record keeping doesn’t cost the taxpayer anything, and it will save them money when it becomes tax time. Good records will make sure that you pay only the correct amount of tax, no more, no less. So, save your receipts, save your documents,” Brunson says.