• Cash Contributions: Cash contributions are contributions of money, whether made by cash, check, or credit card. If you contribute to a charity and receive something in return, such as dinner or a tote bag, then your deduction is the amount you paid minus the value of the goods or services received.


New for 2007: You must have a receipt from the charity or a bank record for all charitable cash donations in order to claim a deduction on your tax return.


• Non-Cash Donations - General: The deduction for a donation of property is usually the lesser of your basis in the property or its fair market value (FMV). A deduction for FMV is permitted for long-term capital gain property, such as stock, that you've held more than a year.



• Vehicle Donations: A special rule applies if you donate a car, boat, or plane with a claimed value of more than $500 to a charity. If the charity sells the vehicle, you can deduct only the amount received from the sale of the vehicle. However, you generally can deduct its fair market value if the organization:


• makes significant intervening use of the vehicle



• materially improves the vehicle



• transfers the vehicle to a needy individual whose receipt of the vehicle is directly related to your charitable purpose of relieving poor and distressed or underprivileged people.



• Household Items: You can deduct the purchase price of new items, but the amount of deduction for used goods, such as clothing, household goods, furniture, or other non-cash items is based on the item's "fair market value." Many taxpayers underestimate the value of their contribution. To better determine the value of your donated items, consider checking out prices at the thrift store where your donation will be sold. The item must be in "good used condition" or better to qualify for a tax deduction. A deduction may be allowed for an item worth $500 or more if you attach a qualified appraisal to your return.



• Out-of-pocket Expenses: You can't deduct the value of your time or services spent on charitable work. But you can deduct out-of-pocket expenses. For example, if you use your vehicle in the performance of charitable work, the deduction is 14 cents/mile or actual expenses (oil, gas, etc.). Be sure to keep good records of vehicle use and all other out-of-pocket expenses.

Other things to consider when claiming donations:

• Contributions are deductible in the year made. As long as your donation was delivered or mailed in 2007, it counts on your 2007 return.



• When it comes to your charity of choice, be sure to do your homework. Only donations to qualified organizations are deductible. IRS Publication 78, Search for Exempt Organizations, contains a list of qualifying charitable organizations.



• You must itemize in order to claim charitable donations.



• Get receipts for property donations. For all donated goods, including clothing and household items, be sure to get a receipt from the charity that includes a description of the donation. If you leave items at a drop site, keep a written record of the donation that describes the property and its condition.



• Request proper documentation for vehicle donations. Be sure to get a Form 1098-C or similar statement from the organization and attach it to your tax return.