As both the holidays and end of
year get closer, it always seems that requests for charitable donations
increase. Be it the Salvation Army Santa outside of the grocery store or a call
from your favorite charity that you give to annually, there is a push for
giving in the last few weeks of the year. This is most likely attributed to the
fact that we are more inclined to help those less fortunate and causes we care
about during the holiday season.
addition to feeling good about helping others, this year-end generosity can pay
off months later at tax time if you follow Internal Revenue Service rules on
tax deductions. Below are a few tips to help turn these donations into tax
Itemizing is Required
matter the amount you give, your charitable gifts will not help your tax
situation if you claim the standard deduction amount on your tax return. You
Schedule A to deduct charitable donations. However, in most cases, there is no
limit on how much you can deduct.
Timing is Everything
must be made by the end of the tax year for which you want to claim the
deduction. For example, if you put a check dated December 31, 2015 in the mail
on that day, it will count toward your 2015 taxes. Mail containing a donation
must be postmarked by the last day of the year to count for that year,
regardless of when it is received. The same applies to donations made on a
credit card. As long as it is charged by the last day of the year, it doesn’t
matter that you might not pay it until the following month.
Know the Tax Status
your charity of choice to ensure it is a tax-exempt organization. Only
contributions to IRS-qualified charities—those with 501(c)(3) status—are
deductible. Feel free to ask the charity that you plan to give to for its tax
status. Any reputable organization will be happy to share this information and
offer proof. Another option is to use the searchable database of exempt
organizations found on the IRS website.
that you know the guidelines to deduct your donation for tax purposes, here
comes the fun part—picking your charity. With all of the charitable
organizations that exist today, you need to be smart to ensure your hard-earned
money will make an impact. Below are tips to help you select and feel good
about where your money is going and how it will be spent.
Narrow Your Focus
advise that it’s more impactful to donate what you can to one or two
organizations, instead of spreading it among 20 organizations. Think about the
cause that most touches you and research related charities to help find the
right one for you. Keep in mind that you can switch it up every year, or every
few months, depending on what your budget allows.
Give to Reputable Groups You
have volunteered at an organization or are otherwise familiar with the work it
does, that’s always a safe bet. Particularly if the mission is important to
you, you’ll be able to donate with confidence. While you may give to an
organization you know this year, take time before next year-end to learn about
other organizations that interest you. Being reluctant to give to strangers is
natural. Wherever you give, be educated about it first.
Let the Internet Help
are a handful of websites that provide in-depth information about charities.
Using these is a good place to start your research. Try
www.charitynavigator.org, www.charitywatch.org or www.give.org (the Better
Business Bureaus’ Wise Giving Alliance). While religious organizations aren’t
typically required to publicly disclose how they spend donated money, many do
reveal this information to the Evangelical Council for Financial
Accountability—www.ecfa.org—so check this site as well.
Don’t be Fooled
times, a fake charity will have a name very similar to a well-known one so make
sure you’re donating to the correct organization.
remember to protect your identify. Scam artists will also take advantage of the
season of goodwill to steal your money or worse, your identity. Never give out
credit card or personal information in response to phone, email or door-to-door
solicitations. Ask for the charity’s website so you can donate that way or a
mailing address where you can send a check. Also, don’t ever give anyone cash.
There’s no way to guarantee where it will end up.
information is provided with the understanding that the association is not
engaged in rendering specific legal, accounting or other professional services.
If specific expert assistance is required, the services of a competent,
professional person should be sought.
Provided as a public service by the member banks of
the Community Bankers Association of Oklahoma.