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.
- Contribution by Checks is when you mail to charity is considered delivered on the date you mail it.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.