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Donating Cash to a Charity

The IRS states, in the 2015 instructions:

You can deduct contributions or gifts you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. You can also deduct what you gave to organizations that work to prevent cruelty to children or animals.

No charitable deduction is allowed for a contribution of $250 or more unless you can substantiate the contribution by a written acknowledgement from the charitable organization. The acknowledgement generally must include the amount of cash (or description of any property contributed) and whether the organization did or did not give you any goods or services in return for your contribution.

 

Did you go to an event or get a gift back?  If you made a gift and received a benefit in re-turn, such as food, entertainment, or merchandise, you can generally only de-duct the amount that is more than the value of the benefit. But this rule doesn’t apply to certain membership benefits provided in return for an annual payment of $75 or less or to certain items or benefits of token value. Example. You paid $100 to a charitable organization to attend a fund-raising dinner and the value of the dinner was $40. You can deduct only $60. This information is typically printed on the receipt.

How do you know that a charity is real?  Well the IRS has a web site https://www.irs.gov/charities-non-profits/exempt-organizations-select-check that you can look them up.  This is cumbersome – so be prepared.  If you want to do research on the charity you can create an account on http://www.guidestar.org/Home.aspx .  This is a free service that lets you look at a charities actual income tax return.  Ok, I’m a bit of a nerd and I’ve looked at the returns of some ‘charities’ and was sickened when I saw the salaries of the founders versus the money actually spent on the general good. If you are going to give your hard earned money away – make sure that it will actually benefit the intended recipient.

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