When it comes to charitable giving, most people agree that giving is its own reward. But a lot of people also agree that if there’s a tax deduction on the table, all the better. Here are four checklist items to make sure your charitable gift actually ends up being tax-deductible each year.
Item #1: Verify the charity qualifies
The first thing to check is that the charity you’re giving to is a qualified charity. Most of the time, that means making sure it’s a 501(c)(3) organization, and there are a few ways to verify that. Before you send the gift, confirm that the charity qualifies for a tax deduction.
Item #2: Gift before December 31
Although you file your taxes on April 15th, every charitable gift for a given tax year needs to be made before December 31st. Make sure any checks are in the mail well before the end of the year.
Item #3: Make sure you’ve gifted enough to itemize
The third thing to check: have you given enough to actually itemize for the year? When you file your tax return, there’s a choice between taking the standard deduction or itemizing. Because the standard deduction doubled in 2017, that threshold is higher than it used to be. Work with your tax professional to make sure you’re getting the value you want out of your charitable contributions for the year.
Item #4: Keep the documentation
The final item is making sure you have proper documentation after you make the gift. Most organizations send a confirmation letter acknowledging your contribution. Hold onto it. It’s the documentation your tax professional will want when they go to file your return.
Don’t leave anything to chance. Take care of those four items each year to get the most value out of your charitable gift.
