Friday, January 27, 2012

Documenting Charitable Contributions

Question: Good Evening Ralph. I donated a ton of clothes and other household items to the Goodwill in December. They told me that I could take a tax deduction on my tax return, but they just gave me a receipt that says I gave them 3 bags of clothes and a sofa. How do I go about taking this deduction on my tax return?

Answer: We get this question at least five times a day and it really does affect your tax return so this is important. Charitable contributions are a schedule A deduction. They are reported based on the type of donation. All cash/check donations are listed by the amount donated (less any goods/services received in the donation). When you donate some of your personal "treasures" you have to complete a separate tax form to the extent that the donation value exceeds a set amount. What we recommend for our clients is that they make an itemized list of the items which were donated and record a fair market value with each item. We then recommend that you attach this list to the receipt from the charity and put it with your tax papers for filing. If you have something which is of great value, you will want to have it appraised and you will want to retain this appraisal.

Tax returns can get very complex quickly, so it's really a great idea to find a qualified professional accountant to prepare your taxes plus give you great advice moving forward. Contact Ralph V. Estep, Jr., of Saggio Accounting+PLUS for expert advice. "We are all about building relationships with our clients," says Ralph. Contact Saggio Accounting+PLUS at 302-659-6560 or today.

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