The end of the year is coming up. People are meeting with their tax preparers to find out how to increase their deductions.
Now is a great time to increase your charitable donations. The charities know it too, so they increase their advertising this time of the year. Most of them look like great causes, but, you need to determine if the charity is legitimate and how your donation will be used.
Choosing a charitable organization can be challenging. Here’s what you need to look for:
- They must have a 501(c) tax status if you are planning to deduct this on your IRS tax return.
- Find out how much of each dollar is used for the cause, versus how much is used for administration expenses. The higher the dollar amount used for the cause, the better.
How do you find that information? Go to www.Give.org before making your donation.
Once you have chosen your charities, make sure you have the proper documentation for tax purposes.
- For monetary donations, a cancelled check can be your receipt.
- For non-cash items such as food, clothing, household items, furniture etc., you will need to make an itemized list of the items with the value. Your tax preparer can help you to determine the value of each item. Make sure to get a receipt for your donation. Attach this to your itemized list and keep it with your tax records.