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Monday, September 24, 2018

Giving stuff away can be complicated

... at least, if you want a tax deduction for it. This is a good article on how to do it properly which is trickier than you might think. I see a lot of contribution receipts in my line of work (as a tax preparer) and many times they are invalid.

Fewer people will itemize their deductions on their 2018 tax returns. For those who will take a standard deduction, charitable giving will be easy because keeping track of donation receipts will no longer be required. However, if you plan to donate and itemize, be aware of the rules, particularly for amounts above $250. (Just $251 can get you in trouble. Over $500, even more.)

While this article gets into the weeds a little bit, it's not as boring as its title might imply:

Lesson From The Tax Court: The Substantial Substantiation Rules In §170

The takeaway: 1) Always get a proper receipt. 2) Know what a proper receipt is.

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