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Deducting Charitable Contributions Isn't Always As Easy As You Think

Deducting your charitable contributions is easy, right? All you have to do is list out which organizations you gave money to and go from there...

Actually, it isn't always that easy. For starters, it's important to keep in mind that contributions to most foreign charities aren't deductible. Under income tax treaty, some contributions to charitable organizations in Canada, Mexico, and Israel are deductible, but the rules get complicated fast. In those cases, you'll definitely want to consult with a tax preparation professional before deducting those gifts from your taxes.

You'll also want to remember that the IRS requires cash contributions (whether large or small) to be substantiated in writing. This documentation should include the name of the charity, amount of the contribution, and the date given. Non-cash gifts, such as donations of good-quality used clothing or household items, must also be accompanied by a receipt indicating date given, the name and location of the charity, and a detailed description of the items donated.

In cases where the donation was made to a U.S. charity and you have a receipt for the gift, the deduction process is relatively straightforward. However, when dealing with foreign charities or if you're lacking documentation, your best bet is discussing your case with a knowledgeable tax preparer before you file.

Serving San Antonio and beyond, Taxation Solutions, Inc. provides tax help to solve tax problems, assist with accurate tax preparation, and generally meet your tax needs.