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How to Write Off Buying Items for Charity on Your Taxes

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We all tend to feel a little more generous over the holidays — that’s why it’s called the season of giving, after all. This time of year, not only are many of us purchasing gifts for our loved ones, but we’re also thinking about the best ways we can give back to the world around us. After all, it’s important to remember to offer a helping hand during the holidays and beyond.

If you’re thinking about buying items to make a non-cash donation to charity this holiday season, here’s how to go about it so it’ll also provide you with some tax benefits.

Find a qualified organization

The first step in writing off your charitable contributions is finding a qualified non-profit organization. Otherwise, if you donated items to a charity without this tax status, you would not be able to write off your charitable donations as a tax deduction.

To ensure your donations are tax-deductible, navigate to the IRS’s website and use the Tax Exempt Organization Search Tool to find a qualified charity of your choice. You can search by the organization’s name or the Employer Identification Number (EIN).

Additionally, if you already have a charity in mind, you can look on its website to verify its status as a 501(c)(3) nonprofit and then confirm it using the IRS’s tool. Some charities you may want to research include:

  • Toys for Tots
  • Make-a-Wish Foundation
  • The Salvation Army Angel Tree
  • Operation Christmas Spirit
  • Christmas Spirit Foundation
  • The Wish Project
  • Jude Children’s Hospital
  • Your local children’s hospitals

You can likely find charitable organizations in your neighborhood that are also accepting donations for the holidays by reading local newspapers and searching for them on Yelp or Google.

Connect with the charity

You’ll need to do your research to find out what kinds of items the charity needs. Perhaps it wants toys, clothes, or household items for its recipients in need, or the charity may not be accepting items and will only want cash donations. You can find this information on the charity’s website, their social media sites, or you can contact the organization directly.

When shopping for toys, make sure they are age-appropriate for the recipients; for instance, if the charity focuses on giving to babies in need, you wouldn’t want to purchase anything that could be a choking hazard.

A quick tip: If you purchase the goods at Target or another store with a rewards program, enter your rewards information so that you can also benefit from your buys.

Write off your charitable donations for a tax deduction

When you want to claim a charitable deduction on your income tax return, you can note them as itemized deductions on Form 1040, Schedule A.

Make sure you keep a receipt of your purchases. For donations worth less than $250, you’ll need a record that shows the organization’s name and address, the date and location of the donation, and a detailed description of what you donated.

For donations worth more than $250, you need to ask the charity for a written acknowledgement of your donation that includes a statement saying whether you received goods or services in return. You’ll also need a description and the fair market value of the items you donated. Many nonprofit organizations will know exactly what kind of statement and receipt to give you, especially if they are well-established.

If your total deduction for all noncash contributions for the year is over $500, you must complete and attach Form 8283.

Keep in mind that the IRS limits your deductible charitable giving to a maximum of 60 percent of your adjusted gross income (AGI) in 2021.

The bottom line

Donating to charity is always a great idea, but it’s even better when you can do it in a way that will also lower your tax bill! By itemizing your deductions and claiming your non-cash contributions to charity, you can owe less come tax time while also giving back to people in need — a win-win situation.

All trademarks not owned by TaxAct, Inc. that appear in this article are the property of their respective owners, who are not affiliated with, connected to, or sponsored by or of TaxAct, Inc.

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