Many gifts given in December were never on a shopping list. According to a recent NBC story, it is the top month for charitable giving, accounting for 18 percent of annual donations. You may not need a shopping list for these benevolent gifts, but there are things to remember if you hope to receive tax deductions for them.
First of all, you can only claim charitable contributions if you itemize your tax return. Secondly, there is a difference between nonprofits and charities. Donations are only deductible when made to a qualified charity under IRS rules. To see whether your organization qualifies, go to https://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-…. Churches, synagogues, temples and mosques are generally eligible to receive deductible donations, even if they’re not on the list. But it’s best to ask if you’re not sure. Contributions to political organizations or candidates are not deductible. If you receive a gift for making a donation, you must deduct its value from the amount you gave.
Of course, there are ways to give beyond writing a check. If they are in good condition, clothing and household goods can be deducted at fair market value. Consult your tax professional regarding special rules for donating appreciated stock, jewelry or artwork. Keep a detailed record of items contributed with dates and descriptions. You now need a receipt or cancelled check for every donation, regardless of the amount. Additional rules apply for contributions of $250 or more.
Donations are deductible in the year in which they are made. So decide when the deduction would be most beneficial. You may want to “bunch” contributions by giving two years’ worth of gifts in one year – provided you don’t go over the ceiling on deductibility for charitable gifts. If you are subject to the Alternative Minimum Tax, charitable donations are still deductible. However, if you aren’t subject to the AMT every year, you may want to make more donations in years with higher tax rates.
For more information on targeting your charitable efforts, give our office a call. We can help you identify causes that align with your values. We can also work with your tax advisor to help you and your causes get the most benefit from your gifts. (We do not provide tax advice; coordinate with your tax advisor regarding your specific situation.)
Written by Securities America for Distribution by Jordan Dechtman.
Important Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Dechtman Wealth Management, LLC [“DWM”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from DWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. DWM is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the DWM’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.dechtmanwealth.com.
Please Note: DWM does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to DWM’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Please Remember: If you are a DWM client, please contact DWM, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently.
Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.
Join our newsletter
