‘Tis the season for giving and giving back. Many people do the bulk of their charitable giving during the holiday season. And in Kansas City, we are fortunate to have a wealth of worthy causes to help people in need year-round. Whether you share your gifts with charities throughout the year or are preparing to do so now, remember all cash donations are deductible up to 50% of your adjusted gross income.
A couple of things you want to consider before you do your giving. Be sure you are contributing to a legitimate organization. If you’re thinking about making a donation to a non-profit you aren’t familiar with, it’s a good idea to take a few minutes to research the organization. A quick website search will provide the information you need. You should have a receipt from the non-profit to serve as your documentation. If you purchase food or other items to pass along, your store receipt will suffice, as long as you document the benefiting agency.
While you can’t deduct for your time spent volunteering, you can deduct the mileage related to your service. And if you are making “in-kind” donations, such as gently used coats, toys, etc., you need request a receipt from the organization to make a deduction. This receipt should also include a value estimate of the goods. It can be tricky to guess, so use a donation value guide to help. Any single donation amount over $500 MUST have more documentation. The IRS requires:
- Name of donee
- Address of donee
- FEIN of the donee
- Description of donation items
- Value of donated items
- How the value of the items was determined
- Whether items donated were “new” or “used”
- If used, what was the cost basis and how was it purchased?
As always, if you have questions, we’re here to help. Reach out anytime at (913) 888-9100.
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.