Holiday Donations: Keep Documentation if You Plan to Deduct

The holiday months and year-end tend to be the peak season for charitable giving. If you plan to make contributions over the holidays – whether it’s an in-kind donation of gifts for a family in need or a financial contribution to a charity that is important to you – it’s important to document your gifts if you intend to deduct them on your 2015 taxes.

For most donations, a receipt from the non-profit organization can serve as adequate documentation (please be sure it is a legitimate organization before contributing). If you are purchasing food or other times to donate, your store receipt will suffice, as long as you document the agency you contributed to. If you’re sharing your time to help people in need, while you cannot deduct the time spent volunteering, you CAN deduct the mileage related to your service.

As we approach the end of the year, this is also a good time to start gathering documentation for all charitable donations made during 2015. Remember, if you donated new or gently used items, it’s your responsibility to assess the value to report on your taxes. Use a value guide, like this one from The Salvation Army, to help determine the appropriate value for your donated items.

If you haven’t already, start a folder to begin your tax prep. Make copies of all receipts related to charitable giving and add them to the file and indicate the date of the gift, as well as contact information (charity name and address) for each non-profit organization. Creating a folder for your 2015 taxes will also serve as a good collection point when tax documents start arriving in the mail after the first of the year.

We can help put a plan in place to make your 2015 tax preparation easier. Let us manage the process for you or provide guidance as to systems we have seen work well for individuals and businesses! You can reach us to discuss at (913) 888-9100.