Video transcript:
Uncle Sam encourages your generosity by allowing deductions for donations to not-for-profit organizations. To qualify, your donations must go to charities with a 501(c) designation from the IRS. Most donations to places of worship, international relief organizations and war veterans groups are deductible.
You can write off cash, property or stock at fair-market values. You can also donate clothing and household items that are in good condition.
In past years, a private log of cash donations under $250 was acceptable documentation. But now for donations of any amount, you must have a canceled check, a bank record, or a receipt from the charity.
Tighter rules also govern gifts and services that accompany charitable donations. For example, if you receive a seat at an award dinner in return for a portion of your donation, that portion is not deductible. Ask the organization to verify the value of your deduction.
If you donated by cell phone, you can now use your phone bill as proof, as long as the bill lists the name of the charity, the date, and the amount you donated.
What does not qualify for a tax break? Donations to civic leagues, clubs, chambers of commerce, homeowners' associations, political campaigns and lobbying groups, and most foreign organizations.
If you don't know if a donation qualifies, call the charity or visit www.IRS.gov. Then use all the tax advantages you can to support the causes that matter to you.
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