Charitable Contributions

You can deduct amounts contributed by check, cash, or credit card to a qualified charitable organization as long as you either have written communication from the donee, indicating the donee’s name and the contribution date and amount or maintain a bank record. This is a new rule for 2007, and applies regardless of the amount.

You can also deduct the value of property, such as used clothing or publicly traded shares of stock, contributed to a qualified charitable organization.

You can get a charitable deduction from the donation of your vehicle as well, but starting in 2005, there are stricter rules about the amount allowed as a deduction. If the charity accepts your vehicle and then simply sells it without using it, the new rules generally limit the amount of your donation to the amount the charity received from the sale of the vehicle. Charities are required to issue detailed statements to you so that you will know the appropriate charitable deduction.

Out-of-pocket expenses related to volunteer work for a qualifying organization are deductible unless you were reimbursed. You can also include mileage (at 14 cents per mile) for use of your car related to volunteer work.

The following organizations typically qualify to receive tax-deductible charitable contributions:

• Organizations that are religious, charitable, educational, scientific, or literary in purpose.

• Organizations that work to prevent cruelty to children or animals.

• Churches, temples, synagogues, mosques, Salvation Army, Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts, Girl Scouts, Boys and Girls Clubs of America.

• Fraternal orders, if the gifts will be used for the purposes listed above.

• Veterans' and certain cultural groups.

• Nonprofit schools, hospitals, and organizations whose purpose is to find a cure for, or help people who have chronic or life-threatening diseases.

• Federal, state, and local governments if the gifts are solely for public purposes.

These gifts are not qualified to receive tax-deductible treatment.

• Gifts to organizations engaged in certain political activities that are of direct financial interest to your trade or business.

• Gifts to groups whose purpose is to lobby for changes in the laws.

• Gifts to civic leagues, social and sports clubs, labor unions, and chambers of commerce.

• Gifts where benefits (i.e. dinner or theater tickets) of equal value were received. If benefits are less than the value of the gift, then the tax-deductible amount is the extra amount paid. For instance, if dinner has a value of $30 and $100 was paid, then the tax-deductible amount is $70.