After the joys of Christmas come the frustrations of tax season.
However, those who make donations to charities during this season of giving may be able to ease a little of their tax burdens.
But officials with the Internal Revenue Service say that those planning on counting their charitable contributions toward tax deductions need to keep a few things in mind.
One of the first things to consider is that only certain types of tax filers are able to get a tax benefit from charitable donations.
"The people who itemize deductions are the ones who benefit from making contributions to qualified charitable organizations," IRS spokesman David Stell said. "And that's typically one-third of all taxpayers."
MAKE SURE ORGANIZATION IS A QUALIFIED CHARITY
But in order to get the benefit, Stell said that taxpayers need to make sure the charities they are donating to are "qualified charitable organizations."
"This comes into play with lesser well-known charities. When you're giving to the Red Cross, you know you're okay. But when it comes to smaller charities with names you don't recognize, it's probably best to check them out," Stell said, noting "this is especially important if you're giving a sizable donation, because if you want to use that for a tax deduction, you have to make sure the organization is qualified."
He said there are a couple of ways to determine whether a certain charity qualifies for tax deductible donations: "check the irs.gov website or directly question the organization."
By visiting the IRS.gov website, Stell said that taxpayers can use the Exempt Organizations Select Check tool.
"The select check tool is a way that they can type in the name of an organization into the search box and see if in fact it is a qualified charity for tax deduction purposes," he said.
Or he said that people can simply ask the charity directly whether it is a qualified organization.
"If there is a concern, you can ask them to show you their tax exempt determination letter," Stell said about situations when you are making a donation in person.
Or if you are making a contribution online, he said, "Many organizations' websites will tell you if they are qualified charitable organizations and if donations to them are tax deductible."
MAKE SURE YOU GET A RECEIPT
But even if the organization is a qualified charity, Stell said you won't be able to claim your donation on your taxes unless you have a receipt.
"Any time you contribute cash or property to a qualified charitable organization, you need to get a receipt for your records," he said, noting "if you give money to a qualified charity and don't have a receipt for it, you can't take the federal tax deduction."
For tax purposes, he said a contribution receipt can include a statement or letter recognizing your contribution, a cancelled check or a credit card receipt.
As an example, Stell said to consider the Salvation Army bell ringers that are seen taking donations outside of stores during the holidays.
"If you put $10 into the bucket and that bell ringer doesn't write you out a receipt, which I don't think I've ever seen one do, then you've done very well in making a contribution to that organization, but you're not going to get to count that $10 toward your tax deductions," he said.
For those who may be concerned about whether they can count religious tithing, Stell said it is still possible to get records showing your contributions to the collection plate.
"Some churches do keep records of tithes and can provide you with a statement at the end of the year showing your total contributions, and I've seen it many times in my career where people used it to claim a deduction," he said.
MAKE SURE YOU DONATE BEFORE DEC. 31
Stell said the holidays are the best time to remind taxpayers about requirements for tax deductible donations because "people's thoughts tend to be toward charity this time of year; it goes hand in hand with the season."
And for those who are in the spirit of giving this Christmas, Stell said he would remind them that in order to claim the deduction on their 2012 federal tax returns, taxpayers need to have made the contribution by Dec. 31.
"Even though you don't file until next year, the contribution must be made before the close of the calendar year," he said.
However, donations made by credit card can still count toward 2012 deductions as long as the charge is made by Dec. 31, regardless of when the charge is subsequently paid off, he said.
"As long as the charge is made before the end of the year then it counts as an amount you can use toward your charitable deductions, even if you don't pay it off until January, February or after," he said.
DONATION OF PROPERTY ALSO ELIGIBLE FOR DEDUCTION
In addition to donations made in cash, by check or with a credit card, Stell said that taxpayers can also claim deductions for certain property donations.
Charitable property donations can be tax deductible "As long as the property is in good used condition or better," he said. "Basically that just means you can't take a deduction for donating something that is unusable."
With property donations, like monetary contributions, all the same rules apply with the donation having to be made to a qualified charitable organization before Dec. 31 and you must get a receipt.
But whereas you can deduct 100 percent of the monetary donations you make, Stell said that with property donations you usually deduct the fair market value of the item or items you donated. However, special rules may apply for certain property.
For more information about the tax rules surrounding deductions for charitable donations, Stell said to consult IRS Publication 526.
"It is a great reference for issues concerning charitable contributions," he said.
To obtain a copy of Publication 526, Stell said you can "get it online at our website, irs.gov; it's free. Or for those who don't have Internet access, which is becoming fewer and fewer, simply call 1-800-TAX-FORM (1-800-829-3676) and we'll mail a booklet out to them at no cost."