Contributions made to qualified organizations that are religious, charitable, educational, scientific or literary in purpose are deductible. It is important to verify the organization’s charitable status. The easiest way to do this is to call or check their website.
A receipt is needed for any donation you wish to claim as a tax deduction. You cannot deduct a cash contribution, regardless of the amount, unless you keep one of the following.
- A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include: a cancelled check or a bank or credit card statement.
- A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution.
But, if your contribution is $250 or more, you must get a receipt from the organization—a cancelled check is not enough.
Donations to Political Causes or Candidates.
Contributions to candidates for political office are never deductible. It’s important to remember that contributions to organizations that use the funds for the purpose of influencing the political process are not deductible.
Hawaii used to have a special rule allowing the deduction of small contributions to candidates; however this is no longer available to Hawaii taxpayers.
It’s unfortunate, but the value of time is not deductible—even if the work accomplishes something a paid position would otherwise accomplish or if it time off of work was taken. However, if you have out-of-pocket expenses related to volunteer work, they are valid deductions. If transportation costs to perform the volunteer work are incurred, the actual cost of gas and oil or the standard rate of 14 cents a mile can be deducted. Add parking and tolls to the amount claimed for either method.
Charitable Event Tickets or Gifts You Receive
The entire amount of a monetary donation is deductible, provided that nothing of value is received in return. If a benefit is received as a result of a contribution, only the part of the contribution that is greater than the value of what you receive is deductible. The charity should give you some kind of written statement as to the value of the meal or item you received in exchange for your contribution. If that value is less than your contribution, you can deduct the difference.
Contributions of Property
Noncash contributions require records describing any property donated and the method used to determine its value. The taxpayer is responsible for valuing the property either through appraisal or through comparison to other property. Generally, charitable organizations will only issue a receipt stating the donation was made and will not assign a value. Clothing or food given directly to victims is not deductible; the items must be given through a charity. Clothing and household items are deductible at its current value, where as food items are deductible at cost.
The fair market value of used clothing or household items is usually far less than the price you paid for them. There are no fixed formulas or methods for finding the value of items of clothing. You should claim as the value the price that buyers of used items actually pay in stores selling used items, such as consignment or thrift shops.
For a guide to the “thrift shop value” of different items, click here.