Charitable Giving

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When you give to charity, you get a deduction on Schedule A of your Form 1040. It sounds straightforward.

With new rules, however, you need to be careful that you've met all the requirements to claim your deduction.

Be careful how you make donations.

The IRS no longer allows you to put cash donations in the offering plate or Salvation Army bucket and take a charitable contribution deduction with no receipt. You must have acknowledgement from the charitable organization of your donation, and a statement that you did not receive anything material in return (if that's true). You may also use bank records, such as a credit card statement or a canceled check, or records of payroll deductions for charitable contributions.

If you receive something in return for your donation, but the cash value of the item you receive is less than the amount you pay, you should receive a statement from the charitable organization telling you how much you paid, how much the item is worth, and your charitable donation.

For example, say you pay $150 for tickets to a fund raising ball. The value of the ticket is determined by the charitable organization to be $75. Your charitable contribution is $75 ($150 - $75 = $75).

If you make a noncash contribution, it's important to deduct the right amount, and to be able to show the IRS how you arrived at that amount.

When you take a bag of household goods or clothing to a local nonprofit thrift shop, the charitable organization generally offers to give you a receipt. The receipt may be blank except for the name of the organization and the date - you are responsible for keeping track of what you donated and determining the value of your donation. Be sure to write what you donated on the receipt or an attached statement.

For most items you give to charity, you can deduct the lesser of your basis in property - generally what you paid for it - or its value when you donate it. That's generally the amount you could have gotten if you sold the items; for example, if you'd had a garage sale.

Donation Values

If you need help determining how much common household items and clothing are worth, use Donation Assistant in TaxAct Plus.

Although the value of items varies considerably by original value, condition, and demand, Donation Assistant helps you maximize the deductible value of your donations.

In addition, you can track all your charitable donations easy, fast and free with Donation Assistant® by TaxAct mobile app. Use it throughout the year to help maximize your deduction for cash, non-cash and recurring donations at tax time.

The app provides more than 1,300 audit-backed values for clothing and household items. At tax time import your donations into TaxAct Plus to maximize deductions.

If you donate noncash items worth less than $250 (per donation), a receipt is all you need to take a charitable tax deduction.

If you donate a noncash item worth $250 or more, but not more than $500, you must have a detailed, written acknowledgment from the organization that includes the name and address of the organization, the date and location of the contribution, description of the donation, and an estimate of the item's value.

If you donate an item worth more than $500, but not more than $5,000, you must also have records of how and when you acquired the property, and how you determined your basis in the property; for example, what you paid for it when you purchased it.

When you donate items worth more than $5,000, in addition to the above information, you must obtain a qualified written appraisal of the donated property from a qualified appraiser.

Donating a car and taking a tax deduction for the fair market value of the car isn't as easy as it was a few years ago when you could deduct the "blue book" value of a donated vehicle.

Now, if the vehicle is worth more than $500, you can only deduct the amount for which the organization sells your car, probably at an auction, or the car's fair market value when you donated it - whichever is less. When you donate the car, you don't know what price the car will bring.

If it sells for far less than you anticipated, you may be disappointed in your deductible contribution amount. There are exceptions if the charity uses the vehicle or makes improvements to it.


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Upcoming Tax Dates

February 1 — Individuals who must make estimated tax payments
If you did not pay your last installment of estimated tax by January 15, you may choose (but are not required) to file your income tax return (Form 1040) for 2016 by February 1. Filing your return and paying any tax due by February 2 prevents any penalty for late payment of the last installment. If you cannot file and pay your tax by February 1, file and pay your tax by April 18.

February 1 — Payers of gambling winnings
If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W2G.

February 1 — Nonpayroll taxes
File Form 945 to report income tax withheld for 2016 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit or pay any undeposited tax under the accuracy of deposit rules.

February 1 — Social Security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2016. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until February 10 to file the return.

February 1 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2016. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more for 2016 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 1 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2016. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 1 — Federal unemployment tax
File Form 940 for 2016. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.

February 1 — All businesses
Give annual information statements to recipients of certain payments you made during 2016 - Details

February 1 — Form 720 taxes
File Form 720 for the fourth quarter of 2016.

February 1 — Wagering tax
File Form 730 and pay the tax on wagers accepted during December 2016.

February 10 — Nonpayroll taxes
File Form 945 to report income tax withheld for 2016 on all nonpayroll items. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Social security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2016. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

February 10 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2016. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2016. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Federal unemployment tax
File Form 940 for 2016. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Employees who work for tips
If you received $20 or more in tips during January, report them to your employer - Details

February 10 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of January.

February 12 — Regular method taxes
Deposit the tax for the last 16 days of January.

February 15 — All businesses
Give annual information statements to recipients of certain payments you made during 2016 - Details

February 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — All employers
Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2016, but did not give you Form W4 to continue the exemption this year.

February 16 — Individuals
If you claimed exemption from income tax withholding last year on the Form W-4, you must file a new Form W-4 by this date to continue your exemption for another year - Details

February 20 — Everyone
Federal Holiday (Washington's Birthday) - Details

February 25 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 16 days of January.

February 28 — Regular method taxes.
Deposit the tax for the first 15 days of February.

February 28 — All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2016.

February 28 — Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2016. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms remains February 1.

February 28 — All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2016. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms remains February 1.

February 28 — Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

February 28 — Wagering tax
File Form 730 and pay the tax on wagers accepted during January.

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