IRS Form 8283: Noncash Charitable Contributions
For individuals who make noncash charitable donations during a given tax year, the IRS offers tax deductions for qualified gifts. These deductions can minimize the amount you have to pay the IRS and maximize the cash you’re able to keep in your pocket. However, there are many do’s and don’ts to keep in mind when it comes to filing IRS Form 8283. In this article, we’ll provide you with an in-depth look at what qualifies as a noncash charitable contribution, how to file Form 8283, and more. Keep reading for all of the details or skip to any section using the links below.
- What Is IRS Form 8283?
- Understanding Noncash Charitable Contributions
- Who Should File Form 8283?
- Why File Form 8283?
- How Do I File Form 8283?
- How to File Form 8283 Electronically
- Where to Mail Form 8283
- Form 8283 Filing Deadlines
- Takeaways: Filing Form 8283
What Is IRS Form 8283?If you make qualified noncash donations to IRS-accepted charitable organizations during the year, these donations may allow you to claim a tax deduction. A qualified charitable tax deduction could reduce the amount of taxable income on your tax return. A lower taxable income may mean that you owe less in taxes during the given tax year. However, if you would like to have your noncash donation item deducted on your income taxes, you will need to file IRS Form 8283.
Understanding Noncash Charitable ContributionsIf you’re considering filling out Form 8283, it’s important to first understand what noncash charitable contributions are. Does that mean that any item you donated to charity can be written off on your income taxes? The short answer is no—the IRS lays out a specific criteria for what qualifies as a noncash charitable contribution, how to calculate the value of donations, and when you can claim a tax deduction. Below, we’ll take a deeper look at what noncash charitable contributions are (and what they aren’t) and help you determine the value of your donated items.
Determining Fair Market Value for Your DonationBecause noncash donations consist of physical objects or property rather than money, the items must be appraised at fair market value (FMV). The IRS defines FMV as “….the price [a] property would sell for on the open market. [This is a] price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.” So how do you determine the FMV of your charitable contribution? Charities are prohibited from assigning value to donations, so identifying how much your donation is worth is a little more complicated than taxpayers may think. Many organizations, like Goodwill, provide value guidelines to help you determine what your donated property is worth. With this information and with the help of a professional tax advisor, you can evaluate whether or not you need to (or may benefit from) filing Form 8283.
Acceptable Uses for Form 8283Noncash donations are one of the most common tax deductions available to taxpayers—but not every donation counts for deductions on your tax return. To qualify for a tax deduction with a noncash donation, your contribution must adhere to a few specific IRS requirements. In order to be eligible for a deduction, your donation must meet the following criteria:
- You must have made a noncash donation to an accepted IRS charity
- Donation must not be a cash, check, credit, or debit donation
- Your noncash donations made during the tax year are collectively worth over $500
- You have the proper documentation and appraisals for the donated item(s) in your possession
Unacceptable Uses for Form 8283Not every noncash donation is eligible for a tax deduction. To fill out Form 8283 and claim a tax deduction, your donations must meet the IRS requirements listed above. In this section, we’ve listed some instances where your noncash donation would not qualify for a tax deduction:
- You made noncash donations valued at less than $500
- Donations made using cash, check, credit, or debit
- Reporting out-of-pocket expenses for volunteer work
Who Should File Form 8283?Form 8283 is filed by individuals, corporations, and partnerships to report their noncash contributions during the tax year. Whether or not you need to file Form 8283 depends on which of these categories you fall into as well as the value of your contribution. Taxpayers in the following circumstances must use Form 8283 to declare their tax deductible donations:
- Individuals who have contributed $500 or more in noncash donations
- C corporations who have contributed $5,000 or more in noncash donations
- Partnerships and S corporations who have contributed $5,000 or more in noncash donations
Why File Form 8283?Almost everyone wants to minimize the amount of taxes they pay. Fewer taxes paid to the federal government means more money to pay necessary expenses, add to your savings account, or just have fun with. If you made a sizable amount of noncash charitable contributions during the past year, then you may be entitled to tax deductions that will save you money. By filing Form 8283, you can capitalize on this opportunity to claim a tax deduction and potentially save a significant amount of money. Additionally, if you run a business, filing Form 8283 can help your bottom line. Claiming a tax deduction on the noncash charitable contributions made by your small business or corporation may lower the amount of taxes your organization will have to pay. This means you’ll have more money that you can devote to improving business operations, investing in new technologies, hiring workers, or increasing the compensation of existing employees.
How Do I File Form 8283?After you’ve determined that you’ve met the required criteria for noncash charitable contributions and decide to file Form 8283, you’ll need to follow the IRS’ filing instructions.
Step 1: Download Form 8283To download IRS Form 8283, go to the IRS website. Generally, you can either print out Form 8283 and mail a paper copy to the IRS or file it electronically.
Step 2: Determine Which Sections You Need to CompleteDepending on the size of your donation, as well as the type of property donated, you may need to fill out either Section A, B, or both. To claim a deduction of $5,000 or less, or to report donations of publicly traded securities, use Section A. To claim a deduction over $5,000, use Section B.
Form 8283 Section A Instructions
Part ISection A, Part I of Form 8283 concerns donated property of $5,000 or less and publicly traded securities. To fill out this section, you’ll need to include the following information:
- Name and address of the donee organization
- If you donated a vehicle, write down the vehicle identification number
- A description of the donation and the condition it was in when donated
Form 8283 Section B InstructionsFor Section B, only include items for which you claimed a deduction greater than $5,000—do not include the publicly traded securities that are reportable in Section A. Items reported in Section B generally require a written appraisal from a qualified appraiser to be filed with Form 8283. If you have made multiple donations valued over $5,000, you will need to complete a separate Form 8283 for each item donated and each donee organization, unless the donation belonged to a similar group of items.
Part IFor Section B, Part I, the donating party must describe the donated items in detail and include a written appraisal from a qualified appraiser. Exceptions to the appraisal rule include donations of:
- Intellectual property
- A vehicle if the deduction for the vehicle is limited to the proceeds from its sale
- Non publicly traded stock of $10,000 or less
- Clothing or household items not in good condition.
Part IIFor Section B, Part II, complete lines 4a through 4e if you contributed less than the entire interest of a property listed in Part I of Section B. A partial interest gift is a donation of your personal property in which you still retain some of the rights. Next, fill out lines 5a to 5c if you placed restrictions on any of your charitable donations listed in Section B, Part I. For example, if you donate a portion of your real estate property for an organization’s use or only allow the organization to use the property for a temporary period of time, this is restricted use property.
Part IIIThis part provides a space for you to list all of the items listed in Section B, Part I that have an appraised value of $500 or less. List those items, then provide a signature and date.
Part IVThis part is where your appraiser will sign, in addition to giving important details such as their name, address, and identifying number.
Part VIn this final part, an official of the organization that you donated to will have to acknowledge that they’re a qualified charitable organization and confirm that they received the property you claim to have contributed.
How to File Form 8283 ElectronicallyWhen you electronically file your tax return, you should be able to attach Form 8283. However, if your donations exceeded $5,000 and you’re required to include the signature of an appraiser and/or charity official, then you may have to mail a physical copy of Form 8283 to the IRS. In either case, a qualified tax professional can help you file Form 8283.
Where to Mail Form 8283In most cases, Form 8283 should be attached to your tax return rather than mailed by itself. If you’re not filing electronically, the mailing address you should send Form 8283 depends on where you live and the type of tax return you’re filing. Refer to the IRS’ page on where to file paper tax returns for more specific information.
Form 8283 Filing DeadlinesForm 8283 is due at the same time as your tax return. Under normal circumstances, the deadline to file your tax return would be April 15. However, due to the complications of COVID-19, the IRS has extended the 2021 filing deadline to May 17.
Takeaways: Filing Form 8283If you made significant noncash charitable contributions during the tax year, then filing Form 8283 could earn you a tax deduction that keeps more money in your pocket. If you need any help navigating this form or any other tax issues, our experienced team has you covered. Community Tax experts are ready to help you file your taxes the right way and get the most out of your deductions this tax season with our assortment of tax preparation and filing services. Chat with us on our website or call us at (844) 328-5857 for a free consultation.