How About Those Charities?
ALRIGHT! It’s that time of year again everyone: TAX SEASON!! So, for all of you wanting to know how to minimize the amount you owe to Uncle Sam, what about those charitable contributions and charitable giving throughout 2013? How do you know what is considered a charitable contribution or charitable giving? What a GREAT question; I’m so glad you asked! Following are some things that can be considered charitable contributions that you may not have ever heard about.
Making an Outright Gift
What is an outright gift? It’s a gift that benefits the charity immediately and exclusively. That means the entire gift goes to the charity, and only the charity, when you gift them the money. With an outright gift, you can get an immediate income and gift tax deduction. Here’s a helpful tip to get you on your way: Make sure that any charity you gave to in 2013 is a qualified charity according to the IRS. Also, you need documentation, meaning you must have a receipt from the charity or be able to produce a bank receipt showing how much you donated.
How do you find these IRS qualified charities? Well that’s simple; just check the following link and it will walk you through how to find those qualified charities:
Will or Trust Bequests and Beneficiary Designators
Now, you are probably thinking, “What on earth does this even mean?!” Just hold your horses; I’m getting to it. This awesomeness has everything to do with making changes to your will. In other words, you make a charitable contribution, which will take place after your death, at which time your estate can take the income and estate tax deductions. All you need to get this underway is a beneficiary designation form, or you can make a provision to your will or trust document.
Here is a link that will provide other options for charitable giving: http://www.symsolutionscpa.com/?p=485
Tax Deduction for Charitable Gifts
If you gave a gift to your favorite charity, chances are it will be partially deductible. It may not be 100% deductible, though. Just make sure you talk to that snazzy person who does your taxes to find out for sure.
Year-End Tax Planning
Now make sure you get your timing right and make your charitable contributions in the years you expect to be in a higher tax bracket. For example, if you know that you are going to be in a higher tax bracket in the next tax year, it might be best to hold off on the gift of giving until January so you can write it off on your taxes for the following year.
A Word of Caution
Be sure you deal with recognized charities; also, be wary of charities that have similar sounding names. It’s all too common for scam artists to use bogus websites, so be careful. Always use the IRS website to make sure the charities are legitimate. The IRS link above will take you to their Exempt Organizations List. A final cautionary bit of advice, always remember to send checks or use credit cards; never send cash.
I hope that this has been helpful. If you need more information on charitable giving and charitable contributions, here is another link: http://www.symsolutionscpa.com/?p=486
Read to your heart’s desire and happy gifting!