Charitable Contributions From Which You Benefit. If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive.

If you pay more than fair market value to a qualified organization for goods or services, the excess may be a charitable contribution. For excess amount to qualify, taxpayer must pay it with the intent to make a charitable contribution.

     Example 1. You pay $75 to a ticket to a dinner-dance at a church. Your entire $75 payment goes to the church. The ticket to the dinner-dance has a fair market value of $25. When you buy your ticket, you know that its value is less than your payment. To figure the amount of your charitable contribution, subtract the value of the benefit you receive ($25) from the total payment ($75). You can deduct $50 as a contribution to the church.

     Example 2. At a fundraising auction conducted by a charity, you pay $500 for a week's stay at a beach house. The amount you pay is no more than the fair rental value. You have not made a deductible charitable contribution.

For Athletic Events. If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the university or college, you can deduct 80% of the payment you made as a charitable contribution.

     If any part of your payment is for tickets rather than the right to buy tickets, that part is not deductible. Subtract the price of the tickets from your payment. You can deduct 80% of the remaining amount as your charitable contribution for the same tax year.

For Charity Benefit Events. If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive.

     If there is an established charge for the event, that charge is the value of your benefit. If there is no established charge, the reasonable value of the right to attend the event is the value of your benefit which you can claim as a charitable contribution. Whether you use the tickets or other privileges has no effect on the amount you can deduct. However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount on which you paid for the ticket.

Types of qualified organizations for your charitable contribution. Generally, only the following types of organizations can be qualified organizations.

1. A community chest, corporation, trust, fund, or foundation organized or created in or under the laws of the United States, any state, the District of Columbia, or any possession of the United States (including Puerto Rico). It must, however, be organized and operated only for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Certain organizations that foster national or international amateur sports competition also qualify.
2. War veteran's organizations, including posts, auxiliaries, trusts, or foundations, that is organized in the United States or any of its possessions (including Puerto Rico).
3. Domestic fraternal societies, orders, and associations operating under the lodge system. Your contribution to this type of organization is deductible only if it is to be used solely for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals.
4. Certain non-profit cemetery companies or corporations. Your contribution to this type of organization is not deductible if it can be used for the care of a specific lot or mausoleum crypt.
5. The United States or any state, the District of Columbia, a U.S. possession, including Puerto Rico, a political subdivision of a state or U.S. possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. Your contribution to this type of organization is only deductible if it is to be used solely for public purposes.

Examples of Organizations. The following list gives some examples of qualified organizations; i) Churches, a convention or association of churches, temples, synagogues, mosques, and other religious organizations, ii) Most nonprofit charitable organizations such as the American Red Cross and the United Way, iii) Most nonprofit educational organizations including the Boy Scouts of America, Girl Scouts of America, colleges, and museums. This also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed. However, if you contribution is a substitute for tuition or other enrollment fee, it is not deductible as a charitable contribution, iv) Nonprofit hospitals and medical research organizations, v) Utility company emergency energy programs, if the utility company is an agent for a charitable organization that assists individuals with emergency energy needs, vi) Nonprofit volunteer fire companies, vii) Nonprofit organizations that develop and maintain public parks and recreation facilities, and viii) Civil defense organizations.

There are certain foreign charitable organizations. under income tax treaties with Canada, Israel, and Mexico, you may be able to deduct contributions to certain Canadian, Israeli, or Mexican charitable organizations. Generally, you must have income from sources in that country. For more information, see Publication 526.

Cash Contributions for 2013. Cash contributions include those paid in cash, check, electronic funds transfer, debit card, credit card, or payroll deduction. You cannot deduct cash contributions, regardless of the amount, unless you keep one of the following:

1. A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include: i) A canceled check, ii) A bank or credit union statement, or iii) A credit card statement.
2. A receipt (or a letter or other written communication) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the charitable contribution.
3. The payroll deduction records is when you make a contribution by having deduction from your payroll and you must keep a record of the following: i) A pay stub, Form W-2, or other document furnished by your employer that shows the date and amount of the contribution, and ii) A pledge card or other document prepared by or for the qualified organization that shows the name of the organization. If your employer withheld $250 or more from the single paycheck, see Contributions of $250 or more

Charitable Contribution Deduction. When to deduct your donation for 2013? You can deduct your contributions only in the year you actually make them in cash or other property or in a later carry-over year. This applies whether you use the cash or an accrual method of accounting.

Time of making your contribution. Usually, you make a contribution at the time of its unconditional delivery.

1. Contribution by Checks is when you mail to charity is considered delivered on the date you mail it.
2. Charitable Contribution by Text Messaging is when a donation made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account.
3. Charitable Contribution by Credit Card is when a contribution is charged on your credit card and are deductible in the year you make the charge.
4. Charitable Contribution by Pay-by-Phone account is a contribution made through a pay-by-phone account are considered delivered on the date your financial institution pays the amount.
5. Stock Certificate. A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or the charity's agent. However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution is not delivered until the date of the stock is transferred on the books of the corporation.
6. Promissory Note. If you issue and deliver a promissory note to a charity as a contribution, it is not a contribution until you make the note payments.
7. Option. If you grant a charity an option to buy real property at a bargain price, it is not a contribution until the organization exercises the option.
8. Borrowed Funds. If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan.

Note: Limits on deduction applies. The amount that you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income (AGI) and that your deduction may be further limited to 30% or 20% of your AGI, depending on the type of property you give and the type of organization you give it to. If your total contributions for the year are 20% or less of your AGI, these limits do not apply to you. Proof of contribution is very important, so make sure your keep your records in a safe place.

Medical ad Dental Expenses for 2013. You can deduct only the part of your medical and dental expenses that is more than 10% of your adjusted gross income (7.5% if either you or your spouse is age 65 or older).

What Expenses Can You Include This Year? You can include only the medical and dental expenses you paid this year, regardless of when the services were provided. If you pay medical expenses by check, the day you mail or deliver the check generally is the date of payment. if you use a "pay-by-phone" or "online" account to pay your medical expenses, the date reported on the statement of the financial institution showing when payment was made is the date of payment. If you use credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged.

Separate returns. If you and your spouse live in a community property state and file separate returns, each of you can include only the medical expenses each actually paid. Any medical expenses paid out of a joint checking account in which you and your spouse have the same interest are considered to have been paid equally by each of you, unless you can show otherwise.

Community property states. If you and your spouse live in a community property state and file separate returns in Nevada, Washington, or California, any medical expenses paid out of community funds are divided equally. Each of you should include half the expenses. If medical expenses are paid out of the separate funds of one individual, only the individual who paid the medical expenses can include them. If you live in a community property state, and are not filing a joint return. For more information, visit our page under Community Property or see Publication 555 of the IRS...