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Check Before Donating

Whatever your charitable passion, you can find an organization supporting it. But how do you determine whether an organization is legitimate?

RED FLAGS

Watch out for these scam signs:

  • Requests for unneeded personal information such as your Social Security number
  • Pressure to donate immediately
  • You can’t verify the organization’s name, address, and website yourself

DO THE RESEARCH

Use the IRS Tax-Exempt Organization Search (TEOS) tool to find information about the charity’s tax-exempt status and if the charity is eligible for tax deductible donations. The charity’s Form 990s posted on the site shows how much of the organization’s revenue is used for charitable work versus administrative expenses.

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Substaintiating Noncash Charitable Donations

Noncash charitable deductions allow taxpayers to deduct the fair market value of donated items on their tax returns. These steps can help ensure your charitable deductions are adequately substantiated and accepted by the IRS.

RECEIPTS EVERY TIME

Regardless of the value, you should have a receipt from the charity for any noncash donation. This document should include the charity’s name, the date and location of the contribution, and a reasonably detailed description of the donated property. Consider taking photos of donated items to document their condition.

HIGHER VALUE ITEMS

If the value of your noncash donations is over $500 for the tax year, you must also include IRS Form 8283 with your tax return. For each item or group of similar items valued over $500, you must provide additional details including when you acquired the item and its original cost.

GET AN APPRAISAL

If you’re donating an item or a group of similar items worth more than $5,000, you’ll generally need a qualified appraisal of the item’s fair market value, and you must also complete Section B of Form 8283. There are exceptions for publicly traded securities, vehicles, and intellectual property.