Charitable donations“You can’t achieve anything without getting in someone’s way. You can’t be detached and effective.”

I have some friends who, every year, from Thanksgiving week through now, have their kids go through their own clothes, toys, games, books, everything and put aside their gently used items to donate. They then have the kids go with them to donate those goods to organizations like Children’s homes, Must Ministries where they can see families in need, and other organizations in need. This gives the children a moment of reflection and appreciation for what they have which others don’t. Some of my friends won’t even take wish lists until the kids do this and makes double the room than they are asking for on their list. Now that’s one way to both give back and do an early spring cleaning!

 

 

 

2.To maximize your deductions, be sure that the organization is a Qualified organization per the IRS’s standards (see their publication by clicking now.) And yes, churches, synagogues, temples, and mosques are de facto charitable organizations.

3.  If you choose to make a “cash” contribution, it’s best to write a check or charge to your credit or debit card where the memo or organization is clearly identified. You will need this supporting documentation to receive a deduction without hassle. Without the contribution support AND the contribution being to a qualified organization, sorry Charlie, the IRS will disallow it as a deduction. So, if you thought you Pay-It-Forward act of kindness at Starbuck’s or paying off someone’s layaway list at WalMart would qualify, sad to say, it won’t BUT, as long as YOU felt good about helping someone else, then really, YOU win in the end 🙂 .

4. Always ask for a receipt. When giving to Goodwill, The Salvation Army, a place of religion, Must Ministries, and other charitable organizations, ask for a receipt and record what you donated right away. Immediately file this in a folder to be recorded at time. This will save you time (and money!) when it’s time to report to the IRS your good deeds. Be sure to be specific in your descriptions. You will be able to claim the current day fair market value so in many cases, you won’t get the value your purchased it for.

5. Exceptions? Aren’t there always some? With non-cash donations, as in #4, the items must be in Good to very good condition. Hopefully you wouldn’t give something that is falling apart, but just to be sure, the IRS is very clear that you can’t just unload your burnt, non-working toaster while expecting to get a tax deduction and also have a clear conscious.

6. Another exception is for your very large items – cars, boats, airplanes, trucks and the like. Instead of the fair market value, you’re limited to the gross proceeds or your purchase price less your sales price.
Of course, you want to follow the exact details and rules on this. You can get more information on how to handle with IRS Form 1098-C.

7. If all your non-cash donations exceed $500, be sure you or your tax professionals completes Form 8283.  This is where noting the organization & details of your donations  as recommended in #4 will come in useful, handy, and a time savings. On Form 8283, you’ll have to include this information.

8. We are VERY close to the end of the year so if you want to contribute cash or non-cash donations, be sure to do it BY December 31. After that date, the deductions will have to wait for the 2016 tax return. Deductions are available for the TAX YEAR donated.

9. Did you donate your favorite Aunt Edith’s jewels? There are special ways the IRS requires  you handle this. Before donating, be sure to talk with your tax professional on how to properly handle this.

10. If you like to donate straight from your paycheck, be sure to file your final year end or the W-2 provided by your employer for supporting documentation.

11. Know your limits. For some items, there are limits to which it can be used as a tax deduction. You want to speak with a tax professional about this. Of course, you can always give more just because it feels good.

12. What do I do if I donate to an unattended drop site? Sometimes giving also means doing it based on our schedules and this may mean you go to a site that doesn’t have an attendant on site at the time you arrive. Sometimes the locations will have cards you can pick up to record the date & specifics of your donation. If not, simply write it down as detailed in this article. If it’s under $500, it probably won’t cause any problems, but of course, always speak with a tax professional for the final advice.

Wishing you a HAPPY & SAFE Holiday season!

Comment below to let me know if you received value from this article. It’s that time of year when this might be the last thought on your family & friends’ minds, why not Share this article on Facebook? You can even bookmark it so you can refer back to it later.

Happy Giving!