November 27, 2008 | Read Time: 1 minute
The Internal Revenue Service has announced its annual changes affecting charitable donations for the 2009 tax year, updating the rules to account for inflation.
One change affects the way donors calculate their charitable deductions. Federal law allows donors to take deductions only for the portions of their contributions that are outright gifts. Donors must subtract the value of any item they receive in return for their gift, not including token items of nominal value.
The revenue service said that a charity could tell a donor that gifts are fully deductible if:
- The donor gave $47.50 or more and received a premium worth $9.50 or less. In 2008, those figures were $45.50 and $9.10.
- The donor received premiums that had a fair market value equal to no more than 2 percent of the amount of the contribution, or $95, whichever was less. In 2008, the dollar figure was $91.
- The donor received appeals that contained small items — such as mailing labels — that were worth a total of no more than $9.50. The amount was $9.10 last year.
The IRS also announced new threshold figures for taxpayers who are affected by a limit on overall deductions, including those for gifts to charitable organizations. In 2009, taxpayers with adjusted gross incomes of $166,800 or more will have to subtract from their deductions 3 percent of the amount by which their income exceeds that amount. The income figure was $159,950 in 2008 (Revenue Procedure 2008-66, Internal Revenue Bulletin 2008-45).
