Year End Tip: Helping Your Favorite Charity
You have probably received written reminders from your favorite (and not-so-favorite) charities in recent weeks as the annual end-of-year plea for donations by charities is underway. If you are so moved to donate, here are some tips to help you get a proper deduction for your good acts. The 2017 federal tax law has now been signed into law and will go into effect for most purposes in 2018. While it looks like the basic rules for charitable deductions will largely remain intact under the new law, with the doubling of the standard exemption, charities are concerned that fewer people will itemize and this will result in fewer charitable deductions.
In any event, to qualify for a charitable donation deduction for 2017, the donation must be made before December 31st. The deduction can range from 30 to 50 percent of the contributions from your adjusted gross income depending on the type of donation and charity. Your income tax advisor can help you with the specifics. If your 2017 donations exceed the threshold for this year, then it may be able to be carried over to the subsequent year.
Here are a few more tips for making effective gifts:
You must donate to a legitimate qualified tax-exempt organization. If you are in doubt about an entity’s status, visit its website and look under the donations tab. It should confirm its tax-exempt status and provide you with the proper
Rules for donating cash or property: the promise (i.e. a pledge) to donate does not count, you must make the donation before year’s end. For proof, keep some form of record, such as a bank statement or receipt. If you donate non-cash items of value, have the donated item appraised prior to the donation to determine the value of the property.
Rules for donating non-cash items: If you donating non-cash items that have a fair market value of over $500, submit Form 8283 with your tax return.
Rules for donating food: If you plan on donating food to a charity, then make sure to get a written acknowledgement from the charity and keep receipts for the purchases.
