If you make a donation of property that has been owned for a period of more than a year, the deduction value is typically the same as the fair market value of the property. There is an advantage with contributing appreciated property because there is a deduction given that equals a full fair market value for the property such as with stocks or real estate. There is no tax on any of the property’s appreciation. This basically means the donator get a deduction for the amount that was never reported as income.
It is very wise to contribute equipment, furniture, and old clothes that you no longer want or use. Individual those donate $1,000 in furniture or old clothes to the Salvation Army or Goodwill should get and keep their receipts. Remember never to throw the contributions in a bin when receipts are not available. These contributions represent real money. For those in the 25 percent tax bracket in the year’s 2008 ad 2009, a $1,000 donation equaled a $ 250.00 tax savings. In addition, there is also a deduction in mileage with bringing your old clothes to a charity. Individuals could deduct $0.14 in 2008 and 2009 for each mile driven for the purpose of charitable deductions.
Another example of a deduction that most people may not be aware of is the transporting of a carload of Cub Scouts. It’s important to note that without a receipt for the services or donations rendered for charitable purposes or to a charity you get no deduction on your taxes.As of 2007, there is a record keeping requirement that states you can no longer claim a contribution of any kind that is in cash form unless there is a bank record that can support it. This means that individuals need to keep a bank statement or canceled check that contains information such as the charity date, amount, name or communication from the charity in written form.