Have you taken all the deductions for charitable contributions you're entitled to? We asked Joe Ogilvie, a tax research specialist for H&R Block World Headquarters in Kansas City, Missouri, for advice.
Contributions to your church, synagogue, or mosque, but if you donate directly to a specific program--a missionary, for example--it's only deductible if he or she is a registered charity. If you give the money to your church, and the church gives money to the missionary, you can deduct your donation.
Donations to veterans groups, volunteer fire companies, and government agencies like a police crime-prevention drive (all fire or police organizations may not be deductible--ask). If you buy something at a benefit, like a sandwich at a firemen's picnic, you can only deduct the portion paid that's over the amount you'd have spent at a business for a similar item. Contributions to Girl or Boy Scouting are also deductible. If you're a Scout leader, your uniforms, travel, and other expenses are deductible (to the extent you're not reimbursed).
If you're traveling to a meeting as an officer of a charitable group--perhaps you're lay leader of your church, or representing your Scouting group at a district meeting--your travel expenses are deductible if they aren't reimbursed. Keep track of your mileage, and you can either list specific expenses for each trip, such as gas and repairs, or deduct a standard IRS rate of 14 cents a mile. Usually, Ogilvie says, you're better off with the 14-cent figure. (The deductible differs for business or medical mileage.)
Don't forget about items such as clothes or books you donate to the Salvation Army or a rummage sale. But if you give away a blouse, you calculate your deduction based on what it's worth used, not what you paid for it. Salvation Army receipts often suggest a range of "fair market values."
What kinds of records are needed?
Give by check whenever possible, so you have a record, but it's not required for small stuff. Ogilvie suggests keeping a notebook where you can jot down small cash contributions throughout the year. Many churches provide quarterly or annual records of giving. If you donate an item worth over $250, you need a receipt or letter from the recipient stating the value. For really expensive items--say you donate a car, valuable artwork, or real estate--the IRS needs to see an independent appraisal of value in addition to a receipt.
Any other paperwork notes?
You can only itemize deductions on the long tax form, 1040, and you'll need Schedule A. If your total nonmonetary donations exceed $500, you need to fill out Form #8283. IRS Publication 526 explains all about charitable deductions. It's available free from the IRS; you can find it online at www.irs.gov.