IRS Offers Tax Tips for "The Season of Giving"
By: Blake Deshazo
Updated: December 6, 2012
December
is traditionally a month for giving generously to charities, friends
and family. But it's also a time that can have a major impact on the
tax return you'll file in the New Year. Here are some "Season of Giving"
tips from the IRS covering everything from charity donations to refund
planning:
- Contribute to Qualified Charities.
If you plan to take an itemized charitable deduction on your 2012 tax
return, your donation must go to a qualified charity by Dec. 31. Ask the
charity about its tax-exempt
status. You can also visit IRS.gov and use the Exempt Organizations
Select Check tool to check if your favorite charity is a qualified
charity. Donations charged to a credit card by Dec. 31 are deductible
for 2012, even if you pay the bill in 2013. A gift by
check also counts for 2012 as long as you mail it in December. Gifts
given to individuals, whether to friends, family or strangers, are not
deductible.
- What You Can Deduct.
You generally can deduct your cash contributions and the fair market
value of most property you donate to a qualified charity. Special rules
apply to several types of donated property,
including clothing or household items, cars and boats.
- Keep Records of All Donations.
You need to keep a record of any donations you deduct, regardless of
the amount. You must have a written record of all cash contributions to
claim a deduction. This may
include a cancelled check, bank or credit card statement or payroll
deduction record. You can also ask the charity for a written statement
that shows the charity's name, contribution date and amount.
- Gather Records in a Safe Place.
As long as you're gathering those records for your charitable
contributions, it's a good time to start rounding up documents you will
need to file your tax return in
2013. This includes receipts, canceled checks and other documents that
support income or deductions you will claim on your tax return. Be sure
to store them in a safe place so you can easily access them later when
you file your tax return.
- Plan Ahead for Major Purchases. If you are making major purchases during the holiday season, don't base them solely on the expectation of receiving your tax refund before the bills arrive. Many factors can impact the timing of a tax refund. The IRS issues most refunds in less than 21 days after receiving a tax return. However, if your tax return requires additional review, it may take longer to receive your refund.
For
more information about contributions, check out Publication 526,
Charitable Contributions. The booklet is available on IRS.gov or order
by mail
at 800-TAX-FORM (800-829-3676).
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