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Tax Tips: 3 Charitable Deduction Traps to Avoid

1. Vaguely worded thank-you notes.The wording of thank-you letters is important, and those who get receipts that leave out the magic words about no gifts or services being exchanged for the donation do not meet the IRS standard.Big donors may encounter this problem more often than others. While the small fry get boilerplate letters, perhaps drawn up... by a lawyer who knows the ins and outs of the tax rules, big donors may get personalized letters from organization's executive directors.

2. Giving to individuals, not organizations Record-keeping problems aren't all that can trip up efforts to get back a little on taxes for your generosity. Tax rules only allow you to take the write off for funds you give to a qualified nonprofit. If you give to an individual, no matter how worthy, that's a gift, and it's not deductible. In the current landscape of immediate, emotionally charged giving - where many people's impulse after watching a tragedy unfold in real time on television or online is to help - it's easy to get tripped up.

3. Donating property without an appraisal Things get more complicated with donations of property or artwork, where differences of opinion over what something is worth can amount of thousands (or millions) of dollars.For those who donate property, it's crucial to get an independent appraisal,even if your donation is worth more than you claim, if you try to determine its value yourself, you could lose the write off. "The IRS will go after procedural faults because valuation faults are so difficult to prove."

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