How to make the most of charitable giving
Find your match
You can only deduct donations to IRS-qualified charities. Most large charities, like American Red Cross and ASPCA, are IRS-qualified. If a local group is near and dear to your heart, just remember to do your homework – searching by tax-exempt charities can help.
Give treasured goods new life
Do you have things you once loved at home that you’ve been meaning to get rid of? There’s no better way to repurpose items than to donate them. Whether it be an antique vase your aunt gave you years ago or clothes your kids have outgrown, you can give old items a new start.
To get the fair market value, anything you donate must be in good condition. Do you have an old couch that doesn’t fit into your new home? Perfect! But send those rusty tools to the recycling center.
Keep up with your good deeds
When you want to donate money, stick to credit cards and checks so you have a record. Be wary about donating cash because it can be tricky to keep track of. Whether you donate money or goods, always get a dated receipt with the charity’s name and donation amount. The IRS requires a receipt for donations over $250.
Know your limits
Typically, there is no limit to how much you can deduct, but if you’re fortunate enough to be able to donate large sums of money, there are a few limitations. Most public charities are 50% organizations, which means donor’s deductions are limited to 50% percent of their adjusted annual income.
Get credit for your generosity
When you do your 2016 taxes, all donations must be itemized on the Schedule A. If you only claim the standard deduction, you could lose out on your charitable deduction benefits because your donations may be greater than the standard deductions you receive. If you plan to donate a large sum of money, here are the Schedule A income limits for 2016:
- $154,950 if married filing separately
- $258,250 if single
- $284,050 if head of household
- $309,900 if married filing jointly or qualifying widow(er)
No matter how you choose to donate this year, pick a charity that you’re most passionate about. Whether it be animal care or the environment, what matters most is your contribution. And what a better way to end the year than giving.