During the holidays, many of us find ways to give back to our communities. After all, it is better to give than receive and all your giving can result in some great savings at tax time if you track your contributions properly. The ExpressTaxFilings Team has all the important information you need to know about holiday donations tax write-offs, so let’s get started…
The tax deductions you can take have many forms when it comes to donations, including: writing a check to your local charity, donating your time at a soup kitchen, donating pet food to the local animal shelter, or dropping off coats and toys to Goodwill or Salvation Army. The part that gets a little tricky when it comes to holiday tax write-offs, as the ones mentioned above, is you have to give to the right organizations to claim these tax deductions.
How You Know
For your donation to qualify for a tax deduction, the organization you are donating to must have tax-exempt 501(c)(3) status with the IRS or be a religious organization that isn’t required to have 501(c)(3) status. What this type of status means is that the organization is a public charity. You can easily find out if the organization you want to donate to has this particular status by checking it with the IRS EO Select Check tool .
Tracking Your Donations For Tax Time
You may already know this, but when it comes to donating to a charity it is very important to document your donations. Then have a copy of that documentation and have it stored somewhere you won’t loose it. Always ask for a receipt when donating so you can claim it on your taxes.
If you plan on donating your time to an organization, you won’t actually be able to write-off that part, but you can write-off the miles driven to, and from, the charity organization. You can track miles driven to volunteer or even haul goods for a charity. The cents per mile that you can deduct for this type of donation changes year to year, so be sure to consult with your tax professional or the IRS for more information.
Filing Your Taxes
Charitable donation deductions can only be taken out if you itemize your taxes, rather than taking the standard deductions. There are a few circumstances where the standard deduction may benefit you more, but be sure to consult with your tax professional to get the best guidance on this matter.
Make sure you have proper documentation of all your donations before getting started and double check the charities to make sure they fall within the 501(c)(3) tax exempt status. It always feels good to give back to your community, and it actually a gift that keeps on giving – all the way to tax time. And as always, consult with your tax professional if you have any questions when filing your taxes.