Make the most of your charitable giving before the New Year begins
About 30% of taxpayers itemize charitable donations on their tax returns. And while it’s great to be charitable, you’ll also want to make sure you maximize what helping others can do for you.
Here’s a checklist to help you make the most of your giving:
Give to a qualifying charity. The IRS has a searchable online database that lists most organizations that are eligible to receive your tax-deductible contributions. Additionally, most religious organizations and government agencies are eligible, even if they are not on the list.
Think about what you donate. While it’s great to give cash, you can also donate household items that are in good shape, clothing, vehicles, or even appreciated securities, which would allow you to claim the fair market value up to 30% of adjusted gross income. And giving an appreciated security is a double win because you won’t have to realize capital gains.
Keep detailed records. Get receipts for all donations of property, and be sure each receipt lists the name of the charity, date of the contribution, and a reasonable description of the donated property, as well as the fair market value of the item(s) donated. Additional rules apply for a contribution of $250 or more.
Don’t overlook other categories of donation. Money you spend out of pocket when volunteering also counts as charitable giving. You can deduct the cost of travel to and from volunteer work, as well as any expenses you incur for, say, materials you need to buy or tolls you pay.
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