Common Giving Reminders:
• Donating your services doesn’t create a deduction and doesn’t appear anywhere on the tax return
• Donating your “stuff” (i.e. goodwill donations) allows you a deduction equal to the lesser of the cost of the item or its fair-market-value only if you itemize. The maximum amount per group of donated items is $5,000 per year (unless you want to get a formal appraisal of what you donated)
• You generally only get a deduction on your return if you give money or stuff to a church, government entity or 501c3 organization and only if you itemize
• …but for 2021 only, you can deduct up to $600 on your return even if you don’t itemize. This deduction is available for donations of money only (donations of stuff doesn’t qualify)
• Donating to a gofundme campaign for an individual is never a deduction on your return (it is a gift to a friend) since your friend is not a church, government entity or 501c3 organization
• If you are taking RMDs from a traditional IRA then it is always more tax-efficient to give money directly from the traditional IRA to the organization (versus giving from your checking or savings account) – this is known as a QCD – Qualified Charitable Distribution
• If you spend money while doing work for an organization, then you can deduct the cost of what you spent if you get a letter from the organization stating that you spent that money on behalf of the organization (if you spend money to go on a mission-trip, then document your expenses and then ask the sponsoring-organization for a letter stating that they acknowledge that you spent the money on their behalf)
• Generally, if you want to somehow take credit for a donation on your return (whether a QCD, a goodwill donation, a monetary donation, etc.) then you need a receipt/letter from the organization by the date that you file your return that contains the following information:
o Name of charity
o Date of contribution
o Detailed description of property donated
o Amount of contribution
o A statement regarding whether or not any goods or services were provided in exchange for the contribution
Accounting and Consulting