Every tax season people come in with their Angel Tree receipts from Walmart, Kmart, Target, ect. When I talk to them about where they gave sometimes they are deductible and sometimes they are not.
Does it matter to you if the gifts are deductible? If not stop reading now and have a Merry Christmas. Thank You for your generosity.
If yes, follow these simple steps to make sure they are deductible.
1. Get a receipt from the organization you donated to. You can deduct a small amount over the course of the year with no receipts but after you hit the magic number you need all the receipts.
2. Purchase the gifts as a separate transaction. In the event of an audit the pics of your kids playing with the toys on the receipt could mean trouble. It is a small step but it can make a big difference.
Last but not least
3. Make sure that the organization you are giving to is an actual IRS 501(c)(3) organization. Gifts to that person on facebook, or some other random citizen are not deductible. Go through your church program or other recognized charity.
Let me know.