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Weeding out charity facts, myths for end-of-year donations

Weeding out charity facts, myths for end-of-year donations

WMBF News/South Carolina

December 30, 2009

Charities say the end of each year brings in a flood of donations, as many direct their money towards causes that warrant a tax write-off.

This year, organizations like the United Way of Horry County are urging residents to donate as they work towards their 2009 fundraising goal of $1.4 million.

“Donations are coming in,” said Julie Kopnicky of the United Way of Horry County. “I know a lot of people are getting their pledges in or at least their payments in by the end of the year, so at least so they can get that tax write off. That not only benefits them but it benefits us.”

Samantha Slapnik, an employee at Liberty Tax Service, says donors should be aware of two different types of contributions – cash and non-cash.

The phrase ‘charitable contribution’ is coined as a donation or gift to a qualified organization. Officials advise people can deduct contributions from their taxes only if their made to qualified organizations such as churches, federal, state and local governments.

“You see a lot of those people making those donations to the church – to the United Way, to the March of Dimes, to the Red Cross – at the end of the year because not only do they get that deduction, but those organizations are really trying to ramp up before it really gets slow before the beginning of the year,” Slapnik said.

In general, organizations that don’t warrant tax-deductible contributions include individuals, business organizations, civic leagues and political candidates.

Non-cash contributions, on the other hand, allow donors to deduct the fair market of property donated to an organization.

“Let’s say if you give a couch to the Salvation Army, what you do is give it and get a receipt,” she said. “You don’t get to deduct the $900 you [may have] paid for the couch, but you get to deduct the fair market value of what the Salvation Army might be able to sell it for. It could be anywhere from $50 to $100 depending on the couch.”

Tax officials say should a person’s total contributions amount to 20 percent or less of their adjusted gross income, deductions are not limited. Officials say contributions that exceed the adjusted gross income limit can be carried over and applied in excess until it is used up in five years.

It is advised donors keep records of all cash and non-cash contributions for 2009 and 2010. For donations made in cash, donors must maintain a record of the contribution such as a bank statement, payroll deduction or written record from the charity.

Gifts of $250 or more, officials say, must be backed by written proof of the gift that includes the amount, whether anything was received in return for the contribution and a description of the services you received in return.

Slapnik says make sure the organization you are donating to is IRS approved.

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