How to claim donations for tax purposes
Doing something good for others at Christmas - many people do this in the form of a donation. If you pay attention to certain things, you can also use the donation to reduce your own tax burden.
Many people are particularly generous at Christmas time. Donations are the order of the day. But what benefits the recipient can also bring a small advantage to the donor. Because under certain conditions, donations are tax-deductible. But how and in which cases?
It's simple: anyone who has donated to a charitable organization enters the amount in the special expenses section of their tax return for the year in question. Donations are deductible up to a total amount of 20 percent of total income. Daniela Karbe-Geßler from the German Taxpayers' Association points this out. If the donations exceed this limit, the remainder can be carried forward to the following year and taken into account for tax purposes at a later date.
In order for a donation to be recognized as a special expense, it must be made voluntarily and without consideration. In addition, the donation in cash or in kind must be used directly for the tax-privileged charitable purposes of the respective association or a so-called special-purpose enterprise.
The tax office needs this evidence
For donations to legal entities under public law with a value of less than 300 euros, simplified proof is sufficient - such as a bank statement. In cases of disaster, this often even applies to amounts over 300 euros. For larger donations, a so-called donation receipt is required. Proof must only be submitted to the tax office when it requests it.
The donation receipt is issued by the recipient of the donation and can also be sent electronically. "The donor is then only obliged to keep the receipt and present it on request," says Karbe-Geßler. If the tax office does not want to see any receipts, they should still be kept for one year after the tax assessment notice has been issued.
In the case of donations in kind, the age, condition and purchase price of the individual items must be stated on the certificate. In the case of used items, the value is calculated on the basis of the market or fair market value. If no information is available, the value can be determined by estimation. In this case, the original purchase price, age and condition must be precisely taken into account and plausibly presented to the tax office.
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When seeking advice on how to claim donations for tax purposes, it's essential to consult with an advisor who is well-versed in legal issues related to tax deductions. As a responsible consumer, ensuring that your donations are tax-deductible can help mitigate your tax burden. After making a donation, conduct necessary tests to ensure that the donation receipt is valid and accurately reflects the amount and type of donation.
Source: www.ntv.de
