The following is from the Internal Revenue Service:
December is traditionally a month for giving generously to
charities, friends and family. But it’s also a time that can have a
major impact on the tax return you’ll file in the New Year. Here are
some “Season of Giving” tips from the IRS covering everything from
charity donations to refund planning:
- Contribute to Qualified Charities: If you plan to take an
itemized charitable deduction on your 2012 tax return, your donation
must go to a qualified charity by Dec. 31. Ask the charity about its
tax-exempt status. You can also visit IRS.gov and use the Exempt
Organizations Select Check tool to check if your favorite charity is a
qualified charity. Donations charged to a credit card by Dec. 31 are
deductible for 2012, even if you pay the bill in 2013. A gift by check
also counts for 2012 as long as you mail it in December. Gifts given to
individuals, whether to friends, family or strangers, are not
deductible. - What You Can Deduct: You generally can deduct your cash
contributions and the fair market value of most property you donate to a
qualified charity. Special rules apply to several types of donated
property, including clothing or household items, cars and boats. - Keep Records of All Donations: You need to keep a record of
any donations you deduct, regardless of the amount. You must have a
written record of all cash contributions to claim a deduction. This may
include a canceled check, bank or credit card statement or payroll
deduction record. You can also ask the charity for a written statement
that shows the charity’s name, contribution date and amount. - Gather Records in a Safe Place: As long as you’re gathering
those records for your charitable contributions, it’s a good time to
start rounding up documents you will need to file your tax return in
2013. This includes receipts, canceled checks and other documents that
support income or deductions you will claim on your tax return. Be sure
to store them in a safe place so you can easily access them later when
you file your tax return. - Plan Ahead for Major Purchases. If you are making major
purchases during the holiday season, don’t base them solely on the
expectation of receiving your tax refund before the bills arrive. Many
factors can impact the timing of a tax refund. The IRS issues most
refunds in less than 21 days after receiving a tax return. However, if
your tax return requires additional review, it may take longer to
receive your refund.
For more information about contributions, check out Publication
526, Charitable Contributions. The booklet is available on IRS.gov or
order by mail at 800-TAX-FORM (800-829-3676).
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