During the holiday season, many people look for ways to give to those who are less fortunate. If you plan to give to charity before year-end and want to make the most of the tax benefits, consider the following.
Donate Clothing and Household Items
Any clothing or household items you donate must be in good used condition or better to be deductible. However, you don’t have to meet this standard if the item is worth more than $500 and you include a qualified appraisal with your return. Make sure you receive written acknowledgement from the charity for all gifts worth $250 or more. Among other things, it should include a description of the contributed items.
If you donate money, you must have a bank record or a written statement from the charity to deduct the contribution. The record must show the name of the charity, the date and the amount of the contribution.
Donate Appreciated Securities
If you have securities that have appreciated in value, donating the securities directly to a charity generally allows you to deduct the full fair market value of the securities but avoid paying tax on the appreciation.
Time Your Contributions
You can deduct charitable contributions in the year you make them.
Keep These Tax Tips in Mind
You can only deduct gifts you give to qualified charities, including religious organizations. And to deduct charitable contributions, you must itemize your deductions. If you claim the standard deduction, the charitable deduction is not available to you.
Talk with the Professionals
Consult with your financial, legal and tax professionals to learn more about making year-end charitable contributions that coordinate with your estate and tax strategies.
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