Tips for Charitable Giving
Making a charitable donation is not only good karma; it’salso a great way to reduce your yearly tax burden. Here are ten tips to make your donationscount:
- Itemizeyour deductions. To claim charitabledeductions, you must itemize them on Schedule A of federal form 1040 usinglines 16-19.
- Choosewisely. Make sure you’re donating toa qualified charitable organization.
- Alwaysget a receipt. Cash deductions mustbe substantiated by a bank record or in writing from the organization.
- Don’tforget payroll deductions. Ifcontributing by payroll deduction, you will need the pledge card showing thename of the charity as well as a pay stub, W-2, or other document from youremployer showing the amount withheld.
- Know thevalue of incentives. If you receivesomething in exchange for a donation, you can only deduct the cost of thedonation minus the value of the item received.
- Donateappreciated assets. Donatingproperty appreciating in value allows you to deduct the fair market value whileavoiding paying capital gains tax.
- Keep goodrecords when volunteering services. Youcan’t deduct for volunteered services, but you can deduct for unreimbursed,out-of-pocket expenses related to volunteering.
- There arelimits. Pay attention to limits oncharitable contributions when contributing more than 20% of adjusted grossincome.
- Checkyour calendar. Contributions aredeductible in the year they are made. Makeyour gifts by December 31.
See Kelly PhillipsErb, Making Your Gifts Count: 10 SmartTips for Charitable Giving, Forbes, Nov. 1, 2013.
Special thanks toJim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringingthis article to my attention.
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