When to deduct contributions

A tax payer can deduct contributions to charities in the year the tax payer make them or in a carryover year. Generally the timing of when to deduct contributions is not a problem. But when a tax payer make donations at the end of the year, it may be hard to determine into which year the deduction falls. The way in which a tax payer make his or her contributions affects when the tax payer can take year end contributions.

Charitable contribution by check

Deduct the contribution in the year you mail the check (even if it is cashed in the following year).

Example: On December 29, 2000, a tax payer mail a $100 contribution to a charity. The charity cashes the check on January 3, 2001. Deduct the donation in 2000.

Charitable contribution by credit card

Deduct the contribution in the year the tax payer charge his or her donation (even if the credit card bill in the following year).

Example: On December 29, 2000, a tax payer charges a $100 contribution to public television. The tax payer receives credit card bill on January 25, 2001, and pay it on February 1, 2001. The tax payer should deduct the charitable contribution in 2000.

Charitable contribution by pay-by-Phone Account

Deduct the contribution on the date the financial institution pays the amount. The date should be shown on the monthly statement that the financial institution sends to the tax payer.