- Qualified Charities
Before you give that year-end donation, make sure the charity is eligible. Only donations to eligible organizations are tax-deductible. Select Check, a searchable online tool available on IRS.gov, lists most organizations that are eligible to receive deductible contributions. In addition, churches and government agencies are eligible to receive deductible donations. That is true even if they are not listed in the tool's database.
- Year-end Gifts
Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2014 count for 2014, even if the credit card bill isn't paid until 2015. Also, checks count for 2014 as long as they are mailed in 2014.
- Itemize Deductions vs. Standard Deductions
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. This includes 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 2014 Form 1040 Schedule A to determine whether itemizing is better than claiming the standard deduction.
- Guidelines for Giving Clothing and Household Items
Household items may include furniture, furnishings, appliances, electronics, and linens. Generally, clothing and household items must be in good condition or better in order be claimed as tax deductible.
Donors must get a written acknowledgement from the charity for all gifts worth $250 or more. The written acknowledgement must include, among other things, a description of the items contributed.
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.
If the amount of a taxpayer's deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.
- Guidelines for Monetary Donations
Regardless of the amount, a taxpayer must have (1) a bank record or a (2) written statement from the charity in order to deduct any donation of money. The record must show the name of the charity and the date and amount of the contribution.
For donations of $250 or more, a written acknowledgement from a charity for each deductible donation (either money or property) is required.
If a minister rents his principal residence, but he performs services (mowing the lawn, repairing the roof, etc.) in lieu of rent, can he still qualify the rent amount for a housing allowance tax benefit?
Of course, bartering income is taxable. The Internal Revenue Code interprets that above situation as follows: tenant/minister receives taxable income for the fair market value of the services he provides, andtenant/minster pays landlord for renal of residence. The minister in this case reports taxable income for services provided in lieu of rent. It is also likely subject to self-employment tax. He may then claim as qualifying housing allowance expense equal to the amount he "pays" for rent of his personal residence. Essentially, there is no difference than if the minister and his landlord simply traded checks.
See a past MinistryCPA post regarding this topic: http://ministrycpa.blogspot.com/2016/09/services-to-church-in-lieu-of-rent-of.html