Make Your Charitable Donations Count on Your Taxes, Too

During the holiday season, many of us take time to donate to our favorite charities and causes. While the season is coming to an end, along with the donation boom, tax season is still around the corner.

Though donating is kind and selfless, it’s not quite the same feeling when you must “donate” your money to Uncle Sam. Luckily, there’s tons of ways to use your holiday donations to your advantage on your taxes. Here’s a few tips to get tax relief through your donations:

• Be sure to itemize.

Itemizing your deductions on Schedule A of your federal 1040 tax form is required for tax relief. Look for lines 16 through 19 on the form.[1]

• Make sure you’re giving to a qualified organization.

This is vital for a legitimate tax deduction. Also, be sure to remember that you may not donate to individuals, political parties, and/or candidates (as of January 10, 2018) [1].

• Get a receipt, even if you donate cash.

Charitable giving done with cash needs to be substantiated by a bank record and clearly annotated with the charity name on the receipt. You should always ask for a receipt when giving to charity. [2]

• Consider donating appreciated assets.

Donating property or stocks can provide a double benefit to you. Not only do you get to deduct the fair market value of the donation, but you also don’t have to pay the capital gains tax on it, either. Talk about a good deal!

 

 

[1]https://www.forbes.com/sites/kellyphillipserb/2015/12/20/11-tips-for-making-your-charitable-donation-count-on-your-taxes/#76ce0d502060

[2]https://www.irs.gov/newsroom/eight-tips-for-deducting-charitable-contributions