Charitable donations make you feel good
Charitable donations make you feel good. And when tax return time rolls around, you’ll appreciate the write-off.
Aside from the tax advantages, giving might really be good for the soul. In fact, most all spiritual traditions advise charitable giving, or tithing: Hindu’s believe that when you feed the poor it helps to offset ‘bad karma.’ And tithing is one of the Five Pillars of Islam. In the Judeo-Christian tradition, references that advise tithing are found throughout the Bible in both the Old and New Testaments.
When you give mainly to reduce your tax burden, be sure to verify that the organization is qualified with tax-exempt status. If you’re aiming for a tax write-off, recipients must qualify as a 501(c) (3) tax-exempt organization.
Whether you’re donating funds or property, it’s important to maintain excellent records. Keep a copy of checks you write as a receipt of your monetary donations. If you donate items like clothing, or other goods, note the appraisal value for each item. Avoid just dumping them in a donation bin where you’ll receive no proof of your donation. In case of an audit, keep a file containing written lists of everything you’ve donated, along with receipts and the estimated value of each item.
If you’re giving higher-priced items, it’s a good idea to get a written appraisal. It’s also recommended to request an acknowledgement letter from the recipient organization that states the date received and value of your gift.
At tax time, if you’ve donated to qualified tax-exempt organizations, remember to file an itemized return. You can consult the IRS with questions by visiting the IRS.gov government website.
If you need ideas on where to give, visit a site like ‘Charity Navigator.’ Recently they published a retrospective of the ten most popular charities of all time, which included by rank, American Red Cross, World Vision, Doctors Without Borders, Invisible Children, American Cancer Society, Save the Children, Susan G. Komen for the Cure, Feed The Children, CARE, Disabled American Veterans, and Charitable Service Trust.
Choose a charity whose principles you resonate with, and whose recipients you care most about. Remember, popularity doesn’t make a charity more effective or more worthy of your support.
The important thing is to give.
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