Seattle-area Philanthropy Advisor, Richard Bray, of www.StrategicGivingAdvisor.com, shares some year-end giving tips for people to maximize their charitable deductions and feel great…
Determine the Right Cause
What cause represents your deepest concern? And do you want to provide direct aid, empowerment assistance or support advocacy efforts? Each has its place. What are you called to do?
Select a Qualified Charity
Check out the IRS online list of qualified charities in Publication 78 to make sure you will get a charitable tax deduction.
Stock gifts must be received by a charitable group by December 31 to qualify as a deduction for 2013. Giving stock to a nonprofit has two great donor tax benefits: 1) Saves you capital gains tax on stock owned over one year, and 2) Provides full market value of the stock as a donation. For example, if John & Susie Smith sell the stock that they’ve owned over a year, they must pay a 20% capital gains tax—ouch! Highest income earners have to pay even more--23.8%! A better, tax-free and painless way: transfer the stock to the charity, let them sell it and pay no capital gains taxes. And John & Susie will enjoy the full market value of the stock as a charitable deduction.
It’s 11:59 pm on New Year’s Eve. You decide to do one last positive act for the year--an online donation. The good news is your online gift to charity then, or any time between now and just before midnight on Dec. 31, will count for 2013. Some groups receive as much as 25% of yearly online donations on Dec. 30 & 31. Join the donations party at year’s end!
Credit Card Gifts
When credit card gifts are mailed in, such as on a donation envelope, the IRS recognizes the gift date as the day the credit card donation is processed by the charity. Be careful about mailing credit card donations near the end of December. If time is running out, you might want to make your donation online to insure your gift counts for 2013.
Donate Cash or by Check
Use some of that Christmas cash to make a difference. Gifts of cash or by check must be dropped off or mailed with a post mark no later than Dec. 31 to count for the current year. A check mailed with a post mark on Dec. 31 will count for 2013, even if the non-profit doesn’t’ receive it until 2014. However, I don’t ever recommend sending cash by mail to charity for safety reasons.
Donate Used Car
You can give that old car or boat to charity and get a tax deduction. The donation value will typically be based on what the charity sells it for--or the fair market value of the vehicle if the charity keeps it to use in its mission. Regardless of use, this can be a nice year-end gift for charity and an extra deduction for you.
Donate Used Clothing & Goods
Clear-out the clutter and earn more charitable tax deductions. Donate clothing and household items in good shape. You have until Dec. 31 to give to charity for the current year. Items must be in good condition to qualify for a tax deduction. Check the Salvation Army Donation Values Guide to get an idea of the potential donation value of these goods, as charities are not allowed to determine worth of donated items on the receipt they give you.
Employer Matching Gift
Check to see if your employer has a matching gift program. Some businesses match 50% or 100% of your gift. There is even one organization I know that matches employee donations $3 to $1. Make your donation to your charity and be sure to request your employer match. You’ll pat yourself on the back (and so will the charity) for leveraging even more aid for your favorite cause.
Establish a Charitable Gift Fund
If you have $5000 or more you can establish a Charitable Gift Fund by December 31 to count for 2013. Charitable Gift Funds are growing in popularity. They are offered by community foundations, some public charities or by investment firms with a non-profit arm. You can establish one now, but you can wait until later to make recommendations to your Gift Fund about groups to receive grants.
These charitable giving suggestions have been done for educational purposes. Please check with your professional advisor to see what is best for your personal situation.
Though the year is about to close, it’s still not too late to make a difference and increase your possible charitable tax deductions for 2013. Whether you itemize or not for your federal income taxes, you can finish this year in wonderful style by doing one more act of generosity. You’ll feel great. And our world will be blessed.
Richard Bray is a strategic giving advisor to nonprofits, businesses and individuals fostering charitable giving and philanthropy that reflects your values and impacts our world. He can be reached at www.StrategicGivingAdvisor.com