Portland, OR. Giving to organizations like United Way has always been a great way to support causes about which you’re passionate, with the added bonus of earning a tax deduction.
Charity Navigator, one of the largest independent charity evaluating services, is offering some simple last minute reminders as your making out your 2017 tax forms. Here’s what you need to know to maximize your tax breaks:
Donations must be tax-deductible.
Not all donations are tax-deductible! To qualify as a tax-deductible contribution, the gift must be made to a charity that has been designated as a 501(c)(3) organization by the IRS. And, you can’t receive anything in return for your gift.
So, what does this really mean?
Organizations that receive a 501(c)(3) designation from the IRS are typically service providers and are not involved in political or lobbying activities. For example, a contribution to your local animal shelter that is involved in rescuing pets, providing them shelter, and finding them new homes would be tax-deductible. However, a gift to your favorite political candidate’s campaign would not be.
Did you attend a gala or dinner fundraiser this year like the Portland Art Museum’s 125th Anniversary gala? The cost of your meal (what the organization pays for the venue and your dinner) is not tax-deductible, however, anything in excess of that cost may be. Contact the organization to find out. (Andrea Lonas Photography)
Donations must be made in the calendar year.
For this tax year, this means your contributions must have been made between January 1, 2017, through December 31, 2017. If you’re one of the many people who wait until the last week of December to make their donations, make sure your receipts are all properly dated for the 2017 calendar year.
Donations must be properly receipted.
It’s important to hold onto all of your donation receipts. This will help you keep track of all of your charitable giving when it comes time to file your taxes, and provide you with records of your gifts if you were to be audited.
It is important that your donation receipts include language stating the date the gift was made, the amount of the gift, how the gift was made (cash, stock, in-kind, etc.), and that no goods or services were received in exchange for your gift.
Donations must be in excess of the standard deduction.
Under the 2017 tax code, individuals receive a standard deduction of $6,350, and couples receive a standard deduction of $12,700. For charitable contributions to count toward increasing your deduction they must be in excess of the standard deduction. A tax prep service or your accountant will recommend itemizing your deduction if it exceeds the amount of the standard deduction. They will use your donation receipts to properly deduct your charitable contributions.
For even more tips and information, check out these additional resources at Charity Navigator:
For specific questions about filing your taxes, deducting charitable contributions, or planning for future charitable giving, it is always best to seek the opinion of a professional accountant or financial adviser.
