GET TO GIVING
As the clock winds down on 2018, many people are scurrying to make their final charitable donations of the year and tally up ones already made. In 2017, Americans gave $410 billion to charities, an increase of five percent over the previous year. For those looking for ways to make the most of charitable donations before the end of the tax year, here are some tips and insights from experts around the country.
KNOW THE NEW TAX LAWS
KNOW HOW MUCH YOU CAN DEDUCT
The law generally allows for deducting contributions up to 50 percent of your adjusted gross income, when such contributions are made to qualifying 501 (c)(3) entity or other qualifying organization, explains Caitlin Worm of Blackbird Philanthropy Advisors in South Bend, Indiana. “Some organization types only qualify for a 30% limitation, such as private foundations, while others qualify for a 60% limitation, such as federal government units,” says Worm.
HANG ON TO RECEIPTS
Keeping track of receipts when making donations is a necessity, says Jacob Dayan, CEO and Co-founder of Chicago-based Community Tax. Donations made in cash are included in this rule. “The receipts should clearly have the organization's name on it, while also stating the date and the entire amount that the organization will receive,” Dayan explains. “Charities will happily provide you with the necessary receipt for your gracious donation.” It’s important to note that you don’t have to submit the receipt with your tax return, but keep it in your possession in case you’re ever audited.
TAKE A DEDUCTION FOR INHERITED PROPERTY
RESEARCH WHERE YOUR MONEY WILL GO
DON’T GIVE A CAR
MAKE SURE YOU’RE DONATING TO AN ELIGIBLE ENTITY
Helping a less fortunate individual in your community is a wonderful thing to do, but it won’t necessarily yield a tax write-off. “Many times, clients bring me donations they made to individuals or entities that are not eligible,” says Scott Vance of Taxvanta. “The donation cannot be made to an individual directly, for instance giving your old car to someone down the street because he has cancer and needs transportation.”