The available tax deduction is not always in exact proportion to the amount given when it comes to charitable gifts. Knowing that not all gifts will be weighed equally at tax time can help you plan your donations for 2016. Our experienced tax advisors can help you decide which donations provide the most tax value.
6 Types of Charitable Donations and Their Tax Deduction Weight
- Money – From cash to checks, credit card, or payroll deductions, no matter how it is given, money donations can typically be deducted 100%.
- Ordinary Income Property - Property such as stocks and bonds held less than one year, inventory, and property that may be depreciated. In these cases you deduct only the lesser of the fair market value or the tax basis.
- Long-term Capital Gains Property - If you donate stocks or other capital gain property held more than one year, you may deduct the fair market value.
- Property Use - If you loan your artwork to a museum, or your vacation home to a worthy cause, you will typically receive no tax deduction because it is not considered a completed gift.
- Vehicle - The amount you deduct is the amount the charity actually receives for the sale regardless of the worth of the vehicle, unless certain exceptions are met.
- Services - You can deduct your personal expenses, but not the actual value of your services. When it comes to driving, you may deduct 14 cents per mile driven for the charity.
Keep in mind that your deductions may be reduced or delayed if they go over certain income-based limits. Also, if you receive any benefit from your charity, you must subtract the benefit you receive from the deduction amount. If you have any questions, contact one of our expert tax advisors to get the most out of your charitable donations.
Was your charitable deduction less than you expected for 2015? Contact our experienced tax advisors for guidance in 2016 at 952-893-9320 or learnmore@BoulayGroup.com.
File Download: Make Sure to Get the Most of Your Charitable Donation Deduction This Year