It's so much fun to give money to charity. But other types of donations can be just as satisfying -- and easier on the wallet. Electronics, stock, cars and boats are just some non-cash donation ideas. Deducting the value of these donations when you file your taxes requires following Internal Revenue Service rules closely.
You can deduct stock donated to charity when you file your tax return -- as long as you have owned the stock for more than 12 months. Even better, if the value of your shares has risen, donating stock to the charity of your choice allows you to sidestep capital gains tax. Depending on the amount of the gift and your capital gains tax rate, you could potentially save hundreds, if not thousands, in taxes by donating. If the value of your stock has dropped, you can still deduct the amount of the gift. But if you cash out the shares before donating, you can also write off the loss on your taxes.
If you are buying a new car, and the trade-in value of your old car is practically nil, giving the car to charity is an option to consider. You can donate directly or via an agency or middleman organization. Vehicle donation organizations allow you to select a charity and arrange for pickup of your car, truck or boat. These agencies inform the IRS of the value of the donation -- typically after selling the car -- and send you the appropriate tax paperwork. If you give your car directly to a non-profit, you may need to prompt the organization to complete IRS matters.
When you buy a new computer, consider giving the older one to a charity. Some non-profits publish wish lists for electronic equipment. Area churches or schools may also be in need. You can often find electronics valuation information online. In addition, the computer manufacturer may be able to offer you a valuation amount. In addition to computers, consider giving away cell phones, tablets, PDAs, printers and scanners.
Clothing and Furniture
Many non-profits can take donations of clothing, furniture and household goods. Some have retail and/or drop-off locations. Others can easily arrange to pick up items from your home address. Some better-known organizations even publish valuation guides, featuring high and low likely resale values per clothing item. Keep in mind that clothing should be clean and in at least "good condition," according to Smart Money, to meet IRS guidelines for claiming a deduction.
Volunteer Work Mileage
As gratifying as it would be to deduct the value of volunteer hours worked for a charity, the IRS does not allow it. However, you can deduct the mileage you incur -- but only at the volunteer mileage rate of 14 cents per mile. If such a deduction seems puny, you can instead write off the cost of gas as an unreimbursed out-of-pocket expense for volunteer work. You can deduct parking and tolls whether you use the mileage rate or the cost of gas.
Just as with cash donations, the IRS imposes reporting regulations. According to Smart Money, if your gift has a value of less than $250, get a receipt from the non-profit organization. Gifts of $250 to $5,000 require more than a receipt. An acknowledgment letter for your files is in order. Cars, boats and other non-cash gifts valued between $501 and $5,000 require, in addition to the acknowledgment letter, your own notation of the item's cost at purchase and current fair market value. For gifts over $5,000 -- excluding securities -- you have to get a written appraisal to justify valuation.
Whenever your non-cash contributions for the year are greater than $500, you have to file IRS Form 8283 with your return.
- Kiplinger: Donate Stock or Cash to Charity?
- Smart Money: The Tax Blog: Deducting Noncash Donations Not Easy
- Salvation Army South: Donation Value Guide
- Independent Sector: Volunteer Mileage Reimbursement and Deduction
- Thomson Reuters: Volunteers Can Claim Charitable Deductions For Out-Of-Pocket Expenses
- IRS: Publication 17
- What Are the Tax Write-Offs for Charity Miles?
- Tax Rules for In-Kind Services & Donations
- How to Estimate Donation Values for Taxes
- Are Charitable Tax Deductions Based on Tax Bracket?
- Tax Deduction for Charitable Clothing
- Does Giving a Car as a Gift Affect Taxes?
- How Much Can a Married Couple Claim for Donations on Their Taxes?
- How do I Give Beanie Babies to a Charity for an IRS Deduction?