Smart Giving: How to Make the
If a cause or charity is inspiring you to give, know how to make the most of your generosity first. The federal government rewards those who make charitable contributions with significant tax breaks, as long as a few rules are met.
To be sure you are donating to a worthy and above-board organization, request a copy of its financial report. It summarizes the organization’s tax status, programs, and how the funds are used. With the exception of places of worship, all charities must file such a report with the IRS. You may also contact your state's attorney general's office or the Better Business Bureau for further investigation.
Sadly, whenever money is involved, fraud is also prevalent. Be particularly cautious when solicited by a charity. Warning signs of scams include:
A wonderful aspect of giving is the ability to deduct at least some of your donation from your income taxes. In order for the contribution to be tax deductible, it must be made to a qualified organization that meets IRS guidelines. To know if it does, you may ask the organization – but to be sure, check the IRS’s “Publication 78” online at www.irs.gov for the most up-to-date list of qualified charities, or call the IRS at 800-829-1040.
How to Donate Money
How to Donate Property
If the organization uses your property (or makes a significant improvement to it), you may deduct its full fair market value from your income taxes. If, however, they simply sell the property, your deduction will be the gross price the charity receives from the sale.
How to Donate Goods
Before boxing them up and delivering them to your local shelter, first determine their fair market value so you can receive the appropriate tax deduction. Fair market value is considered the price at which property would change hands between a willing buyer and a willing seller.
Also for tax purposes, be sure to keep a detailed record of your donations. You should have evidence of the condition and number of items you donated, the date you purchased the items and what their original price was, and signed and dated receipts from the organization that received them.
How to Donate Time
Never before has giving – whether money, property, or time – been more necessary and valued. And by doing it right, your generosity can go a very long way.
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