IRS Offers Tips for Year-End Giving
IRS YouTube Videos:
Year-End Tax Tips: English | Spanish | ASL
Charitable Contributions: English | Spanish | ASL
Exempt Organizations Select Check: English | Spanish | ASL
IR-2013-98, Dec. 16, 2013
WASHINGTON — Individuals and businesses making
contributions to charity should keep in mind several
important tax law provisions that have taken effect in
recent years. Some of these changes include the
Special Tax-Free Charitable Distributions for Certain
This provision, currently scheduled to expire at the end
of 2013, offers older owners of individual retirement
arrangements (IRAs) a different way to give to charity.
An IRA owner, age 70½ or over, can directly transfer
tax-free up to $100,000 per year to an eligible charity.
This option, first available in 2006, can be used for
distributions from IRAs, regardless of whether the
owners itemize their deductions. Distributions from
employer-sponsored retirement plans, including SIMPLE
IRAs and simplified employee pension (SEP) plans, are
To qualify, the funds must be transferred directly by
the IRA trustee to the eligible charity. Distributed
amounts may be excluded from the IRA owner’s income —
resulting in lower taxable income for the IRA owner.
However, if the IRA owner excludes the distribution from
income, no deduction, such as a charitable contribution
deduction on Schedule
A, may be taken for the distributed amount.
Not all charities are eligible. For example,
donor-advised funds and supporting organizations are not
Amounts transferred to a charity from an IRA are counted
in determining whether the owner has met the IRA’s
required minimum distribution. Where individuals have
made nondeductible contributions to their traditional
IRAs, a special rule treats amounts distributed to
charities as coming first from taxable funds, instead of
proportionately from taxable and nontaxable funds, as
would be the case with regular distributions. See Publication
590, Individual Retirement Arrangements (IRAs), for
more information on qualified
Rules for Charitable Contributions of Clothing and
To be tax-deductible, clothing and household items
donated to charity generally must be in good used
condition or better. A clothing or household item for
which a taxpayer claims a deduction of over $500 does
not have to meet this standard if the taxpayer includes
a qualified appraisal of the item with the return.
Donors must get a written acknowledgement from the
charity for all gifts worth $250 or more that includes,
among other things, a description of the items
contributed. Household items include furniture,
furnishings, electronics, appliances and linens.
Guidelines for Monetary Donations
To deduct any charitable donation of money, regardless
of amount, a taxpayer must have a bank record or a
written communication from the charity showing the name
of the charity and the date and amount of the
contribution. Bank records include canceled checks, bank
or credit union statements, and credit card statements.
Bank or credit union statements should show the name of
the charity, the date, and the amount paid. Credit card
statements should show the name of the charity, the
date, and the transaction posting date.
Donations of money include those made in cash or by
check, electronic funds transfer, credit card and
payroll deduction. For payroll deductions, the taxpayer
should retain a pay stub, a Form W-2 wage statement or
other document furnished by the employer showing the
total amount withheld for charity, along with the pledge
card showing the name of the charity.
These requirements for the deduction of monetary
donations do not change the long-standing requirement
that a taxpayer obtain an acknowledgment from a charity
for each deductible donation (either money or property)
of $250 or more. However, one statement containing all
of the required information may meet both requirements.
To help taxpayers plan their holiday-season and year-end
giving, the IRS offers the following additional
Contributions are deductible in the year made. Thus,
donations charged to a credit card before the end of
2013 count for 2013. This is true even if the credit
card bill isn’t paid until 2014. Also, checks count
for 2013 as long as they are mailed in 2013.
Check that the organization is eligible. Only
donations to eligible organizations are
Organization Select Check, a searchable online
database available on IRS.gov, lists most
organizations that are eligible to receive
deductible contributions. In addition, churches,
synagogues, temples, mosques and government agencies
are eligible to receive deductible donations, even
if they are not listed in the database.
For individuals, only taxpayers who itemize their
deductions on Form 1040 Schedule A can claim
deductions for charitable contributions. This
deduction is not available to individuals who choose
the standard deduction, including anyone who files a
short form (Form 1040A or 1040EZ).
A taxpayer will have a tax savings only if the total
itemized deductions (mortgage interest, charitable
contributions, state and local taxes, etc.) exceed
the standard deduction. Use the 2013 Form 1040
Schedule A to determine whether itemizing is better
than claiming the standard deduction.
For all donations of property, including clothing
and household items, get from the charity, if
possible, a receipt that includes the name of the
charity, date of the contribution, and a
reasonably-detailed description of the donated
property. If a donation is left at a charity’s
unattended drop site, keep a written record of the
donation that includes this information, as well as
the fair market value of the property at the time of
the donation and the method used to determine that
value. Additional rules apply for a contribution of
$250 or more.
The deduction for a car, boat or airplane donated to
charity is usually limited to the gross proceeds
from its sale. This rule applies if the claimed
value is more than $500. Form
a similar statement, must be provided to the donor
by the organization and attached to the donor’s tax
If the amount of a taxpayer’s deduction for all
noncash contributions is over $500, a
be submitted with the tax return.
And, as always it’s important to keep good records
IRS.gov has Additional information on charitable giving