Make the Most of Charitable Giving
3 min. read
By: FCU Team
It’s Giving Tuesday! Yes, we know that doing a good deed feels great all on its own! However, you definitely shouldn’t miss an opportunity to help yourself while helping others by claiming your charitable giving as a tax credit. Giving Tuesday falls on the first Tuesday after Thanksgiving each year, and it’s just in time for the IRS’s charitable donation deadline, which is December 31st.
If you intend to claim your donation for a tax deduction, you should first make sure that you are giving to a qualified organization. Be sure that you’ve reviewed what constitutes a qualified organization on the IRS website before making your donation if you’re expecting a deduction. Remember, if you receive a benefit because of your contribution, such as a gift, or other goods or services, then you can only deduct the amount that exceeds the fair market value of the gift.
In order to deduct a monetary gift, regardless of the amount, you must have a bank record, payroll deduction records or a written communication from the organization containing its name, the date, and amount. This can get a bit tricky in today’s society since things are sometimes a bit less formal. For text message donations, a phone record will meet the document requirement if it shows the name of the organization, the date, and amount given. If you’re considering donating to campaigns through sites like GoFundMe, keep in mind that often these are considered “personal gifts” and are not guaranteed tax deductions. Review information directly from the organization or consult with a tax professional if you want to be sure.
What to file
As we all know, taxes can be tricky. To be sure, that you're filing the right forms, check the IRS website or consult with a tax professional before you get started:
- To deduct a charitable contribution, you'll need to file Form1040 and itemize deductions on Schedule A.
- If your total deduction for all non-cash contributions for the year is over $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.
- Taxpayers donating an item or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which generally requires an appraisal by a qualified appraiser.
Charitable giving, like most everything else, has its peak season. If you decide to wait, it could mean longer processing times for paperwork from organizations. To avoid missing the December 31st deadline, be sure to give yourself enough time to make your donation and to get all of the appropriate documentation you’ll need to file.