haritable contributions offer proof that the Golden Rule is a credo to live by. It not only allows you to feel good about giving, but lets you receive a tax deduction.

A charitable contribution is a gift to a qualified organization. The tax law allows charitable contributions as itemized deductions. Because these gifts are deductible, the actual cost of the donation is reduced by your savings. For example, if you are in the 28 percent tax bracket, the actual cost of a $100 donation is only $72 ($100 less the $28 tax savings). As your income tax bracket increases, the real cost of your charitable gift decreases, making contributions more attractive for those in higher brackets. The actual cost to a person in the lowest bracket, 15 percent, for a $100 contribution is $85. For a person in the highest bracket, 39.6 percent, the actual cost is only $60.40.

A contribution is deductible in the year it is paid. Putting the check in the mail constitutes payment. A contribution made on a credit card is deductible immediately, even if payment to the credit card company is made in a later year.

You can deduct contributions only if they are made to or for the use of a qualified recipient. No charitable contribution deduction is allowed for gifts to other kinds of organizations, even if those organizations are exempt from U.S. income tax. Contributions to foreign governments, charities and private foundations similarly are not allowed. The Treasury Department publishes "Internal Revenue Service Publication 78", which lists the organizations to which contributions are deductible, identifies each by type, and states their corresponding limit of deductibility. Moreover, no charity can take part in any political activity. (Speaker of the House Newt Gingrich, who ran afoul of the House Ethics Committee, knows this rule quite well.)

An organization could lose its charity status if it devotes a substantial part of its activities to formulating propaganda or otherwise trying to influence legislation. However, an organization, other than a church, may qualify as a charity and still perform some of these activities by keeping its political expenditures to an "insubstantial" part of its activities. Furthermore, donations to needy individuals are not deductible. (Don't bother getting receipts from panhandlers!)

For most people, the limits on charitable contributions don't apply. Only if you contribute more than 20 percent of your adjusted gross income to charity is it necessary to be concerned about donation limits. If the contribution is made to a fully-accredited charity, the deduction is limited to 50 percent of your adjusted gross income. For example, if you have an adjusted gross income of $100,000, your deduction limit for that year is $50,000.

The rules on 20 percent limits and 30 percent limits are complicated and convoluted. If you are giving to organizations other than those mentioned above, first consult with your tax adviser to determine whether these other ceilings will apply.

If you give more than 50 percent of your adjusted gross income to charity in one year, the excess is carried over for the next five years. Five-year carryovers are also available for the 20 percent and 30 percent limitation groups.

If you contribute property, the value of the deduction is normally equal to the property's fair market value. You have an advantage when you contribute appreciated property because you get a deduction for the full fair market value of the property. You are not taxed on any of the appreciation, so, in effect, you receive a deduction for an amount that you never reported as income.

You should clearly contribute, rather than throw away, old clothes, furniture and equipment that you no longer use. If you bring $1,000 in old clothes or furniture to Goodwill or the Salvation Army, make sure that you get a receipt. Never throw such contributions into a bin where no receipt is available. I want you to picture the faces of dead presidents on that receipt. It represents real money in your pocket. If you are in the 28 percent bracket, that receipt is worth $280 in tax savings to you. You would never leave a store without your change; never leave a contribution without a receipt.

Don't forget the mileage deduction for bringing the old clothes to the charity either. You are entitled to 12 cents a mile for each charitable mile you use your car. And if you are transporting a carload of cub scouts or using your car for any other charitable purpose, the mileage deduction is available. Alternatively, you could deduct the actual costs of transportation, but you would need receipts to prove them. Unfortunately, you get no deduction for the value of services rendered to the charity or for charitable purposes.

The Omnibus Budget Reconciliation Act of 1993 changed the rules for charitable contributions. Now, no deduction is allowed for a separate contribution of $250 or more unless you have a written confirmation from the charity. A canceled check alone is not enough. If the contribution is to a religious organization solely for an intangible religious benefit (annual dues, for example) written proof is still required but the charity does not need to place a value on the donation. All other contributions of cash require the charity to estimate the fair market value of any goods or services given in exchange for that contribution.

Moreover, any solicited quid pro quo contributions of more than $75 require the charity to tell you in writing how much is deductible. Eighty percent of the cost that many colleges now charge fans to simply have the right to purchase season tickets to their basketball or football games is deductible. That is because the government considers it a charitable donation to the financial institution. No amount paid for the purchase of tickets is deductible.

Remember, it's always better to give than receive. The glory of charitable donations is that you give and receive at the same time.