A tax deduction for charitable giving isn’t guaranteed just because you’re feeling generous. As with everything in tax law, it’s important to follow the rules.
As the holiday giving season begins with the tax year ending shortly thereafter, now is a good time to plan your giving. But take note: there is giving, and then there is “smart” giving. And since you want the best outcome for both you and the charities you support, smart giving is accomplished by thorough planning.
Fortunately, Forbes has provided some giving tips and reminders well in advance in a recent article titled “Making Your Gifts Count:10 Smart Tips For Charitable Giving.”
While there is much to say and consider regarding each of these 10 points, here they are if you are looking for a checklist:
- Itemize.
- Choose carefully.
- Get a receipt – even for cash.
- Don’t overlook payroll deductions.
- Pay attention to the value of any incentives.
- Consider donating appreciated assets.
- You can’t deduct the value of your time.
- Document the value of your gift.
- Limits may apply.
- Pay attention to the calendar.
It is worth noting, however, that this is really only the beginning of smart charitable giving. What are your ambitions and what are your goals?
The higher you set your giving sights, then the greater your need to pre-plan and seek appropriate legal, financial and tax counsel.
Reference: Forbes (November 1, 2013) “Making Your Gifts Count:10 Smart Tips For Charitable Giving”