Giving back is a great way to help people in need in our community. And if you keep track of the charitable contributions you make throughout the year, you can deduct them on your income tax as well!
The most common question we get related to this topic is, “How much can we claim (or deduct)?” To answer this simply, all cash donations are deductible, as long as you itemize your deductions. If you don’t itemize, you can still donate, but it will not count on your tax return. You will want to have receipts available or records of each donation made, as well as contact information for each non-profit you made a contribution to.
If you make non-cash donations, or in-kind gifts, the maximum deduction is $500 per year, unless you get an appraisal for the items donated. These are donations you make of gently used clothing or household items to charities in our community. Be sure to request at receipt for these donations and report the fair market value of your donation.
One point often overlooked is the Charitable Mileage deduction. If you volunteer on a regular basis, you may incur significant mileage related to your charity work. For 2014, the standard mileage rate per mile driven in service of charitable organizations is 14 cents. For mileage records, you should track the dates of service, location, brief description of service and the miles traveled roundtrip.
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.