.png?width=120&height=77&name=Summit-Virtual-CFO_color_rgb%20(1).png "Summit-Virtual-CFO_color_rgb (1)")
When you give charitable gifts to a worthy cause it’s a win-win for both you and the charity. How’s that work? You not only help a worthy cause but if you itemize your deductions, you can reduce your 2016 tax bill.
Contributions. Generally, you are able to deduct the entire amount of contributions you make to a qualified charitable organization, up to 50% of your adjusted gross income for the year. If you make large contributions, you can carry the excess forward for 5 years. You must get “written receipts” for monetary gifts of $250 or more from this charity.
Credit card donations. You can charge a charitable donation as late as December 31st, and still take the deduction on your 2016 return, even though the bill is not due until 2017.
Gifts for goods/ services. A gift of more than $75 which in return, you receive goods or services a charity must provide a “good faith” estimate of goods/services received and any payment amount that exceeds the value of the gift. Any amount that exceeds the fair market value can be deducted.
Time gifts. You cannot deduct the “value” of volunteer services you provide. However, you can deduct any out-of-pocket expenses that are incurred on behalf of a charity. For instance, long-distance travel, lodging, and local transportation.
Property Gifts. Usually, for gifts of property the annual deduction is 30% of your adjusted gross income. However, can carry the remainder forward for five years. In most cases you can deduct a property’s fair market value when you donate appreciated property that you’ve owned for more than one year. Though, you will need an independent appraisal for gifts over $5,000. The gift must be used to further the charity’s tax-exempt mission in order for you to claim the full deduction. For example, if you were to donate a painting to your alma mater, it must be displayed where students can study it.
Whether it is personal or business, it’s important to have a plan that works. For more tips contact our office at (855) 977-7623 to schedule an appointment with our advisors. At Summit CPA we offer multiple resources that will help get you on the right track. By utilizing our Virtual CFO we have the capability to assist you virtually anywhere in the USA.
