Tis the season for tax-deductible giving.  Over 150 million Americans are expected to make year-end donations of over $75 billion dollars to help hurting charities and churches and those they serve.

If you don’t want the IRS Grinch (or your tax preparer or accountant) to bite you in April over your December year-end donations, here’s what you need to know:

1.      CASH GIFTS are NOT tax-deductible. Cash gifts are only deductible if they have been put in an envelope with your name on it so the gift can be properly receipted by the charity or church.

2.      CHECKS DATED DECEMBER 31^st are NOT tax-deductible if given on January 1^st or later.  Sunday falls on January 2^nd this year.  According to IRS rules, checks given in the offering plates of 350,000 churches in America on Sunday, January 2^nd must be counted as a gift in the new year even if someone put December 31^st as the date on the check.  But any donations make to a church or charity made online on their website or at www.networkforgood.org on December 31^st are tax-deductible. 

3.     VOLUNTEER HOURS are NOT tax-deductible.  No matter how much time or services a person donates time to their favorite charities, their time is NOT tax-deductible as a donation.  But if you document miles driven in service of charitable organizations, you can deduct 14 cents per mile.

4.      RAFFLE TICKETS, DINNERS, CARNIVAL, AND BINGO EXPENSES are NOT tax-deductible.  Just because you are helping a tax-exempt organization does not mean all financial transactions are tax-deductible.

5.      PRODUCTS purchased from charities are NOT 100% tax-deductible.  Many charities sell books, magazines, CD’s, food, seeds, and many other things.  One cannot deduct the full amount paid to a charity for products.  If the charity charges $10 for a box of candy that normally sells for $8, only $2 can be claimed as a charitable contribution.  Some charities will accept donations for products, but will issue you a receipt you can use that displays the value of the product and how much can be claimed as a donation.

6.      ANY MONEY given to individuals is NOT tax-deductible.  While it is a good thing to help a family in need or religious workers, no cash or checks made out to individuals are tax-deductible.  Only gifts that are given directly to an IRS registered organizations and their official programs are tax-deductible.  For example, you can give money to a church’s benevolence program to help people in need, but you cannot mandate who they give it to and expect a tax-deductible receipt from the church. A person may recommend a person or family in need, but the final decision about who gets the money must be made by the church.  The church CAN pass along an anonymous gift to a needy family or person, but they cannot issue a tax-deductible receipt for the gift.

7.      GIFTS-IN-KIND are NOT tax-deductible without a form or letter from the charity that they received the items.  Also be aware that charities are NOT allowed to issue a donation receipt for any stated “value” of gifts-in-kind.  For example, if you could donate furniture to a homeless shelter, you cannot ask them for a receipt saying the furniture is worth $500.  They can only give you a form or letter saying they received the item(s).  It is the donor’s responsibility to document how they arrived at the value of the donation for the gifts-in-kind they gave.  When donating item to Goodwill and Salvation Army, make sure you get one of their donation acknowledgement forms that you can calculate the value of what you donated.   To determine the value of your donated goods, go to: http://www.bankrate.com/finance/money-guides/tax-guide-for-donated-goods.aspx

ABOUT THE AUTHOR: Brian Kluth is known as America’s Giving Guy and he is frequently quoted or interviewed by news casts, talk shows, and publications nationwide.  He is also a Radio Speaker for www.GiveWithJoy.org, and Bestselling Author of the 40 Day Journey to a More Generous Life that has been used by nearly 1500 churches to inspire generosity and increase giving.