IRS offers tax tips for 'The Season of Giving'

In this Special Edition Tax Tip, the IRS provides information to help you combine charity with tax savings and prepare for the upcoming tax return filing season.

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 cancelled 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).

To automatically receive IRS tax tips, visit IRS.gov, click on "News" and select "e-News Subscriptions."


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MSgt. John DeLallo December 09, 2012 at 03:18 PM
I guess hitting the Powerball and moving to the Cayman Islands isn't on the IRS suggested list of things to do ;-)
JennyIRS December 10, 2012 at 12:59 PM
... Well, it didn't make the Top Five, anyway. MSgt -- as in "Top" of U.S. Marines? We've got a special section on our IRS.gov website populated w/info for U.S. servicemembers and families, at http://www.irs.gov/uac/Tax-Information-for-Members-of-the-U.S.-Armed-Forces. Plus, IRS Publication 3, Armed Forces Tax Guide, can provide some $-saving tax information; it's accessibe in PDF at http://www.irs.gov/pub/irs-pdf/p3.pdf. Thanks for your service!
MSgt. John DeLallo December 10, 2012 at 05:09 PM
Careful, Jenny, someone will think the IRS has a sense of humor :) Its Air Force, actually. I'm going to sneak a peek at the Armed Forces Tax Guide, but honestly, only 70% of my retired income is subject to Income Tax (30% disability rating), and I don't have any earned income. I should adopt a couple of kids and get the Child Care Credit, but I don't think adoption agencies would look favorably on a sixty something retiree. In all seriousness, thanks for putting in the info for Veterans, whether active duty or retired. I'm betting there are a number of tips in there that can save our warfighters from a good deal of taxation.


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