December - Get the Most Out of Seasonal Giving
By Tammy Mitchell
Well, it’s that time of year again: The air grows crisp with the scent of winter, the holiday season is fast approaching, and the frugal-minded are looking for ways to better their financial situation for 2018. One way to do this is to donate to your favorite charity. Kelly Phillips Erb – staff writer for Forbes – wrote in her online article entitled 11 Tips for Making Your Charitable Donation Count On Your Taxes, “Making a charitable donation is not only a chance to make a difference: it’s also an excellent way to reduce your tax burden for the year.” As the old saying goes, “you have to give to receive.”
Americans donated over $358 billion to charities in the 2014 tax year. When you pass the menagerie of seekers vying for your help, however, there are some things to keep in mind while you indulge in the “season of giving.” According to Erb, not all donations count on your tax return. Certain rules apply. I highlight a few specifics from her article here, but I highly suggest you read her entire piece of work to get the most out of your donations.
The first thing Erb says to do is “itemize.” You can only claim charitable deductions if you itemize deductions on your tax return. “Choose carefully,” she says — not all organizations qualify as a deduction on your tax return, and you cannot deduct money that you gave to individuals. “Pay attention to the calendar” – donations must be made or mailed out by December 31st, which is New Year’s Eve (a holiday), so my suggestion is to mail it out by the 30th to be sure it is post-marked for the 2017 tax year. “Pay attention to incentives” – if you donate $29.95 to One Step Away, and receive an OSA tote bag worth $9.95, you would only be able to claim $20.00. “Consider donating appreciated assets” – say you donated an office to OSA, “not only can you deduct the fair market value of the property, you avoid paying capital gains tax.” “Get a receipt” – it is always best to keep your tax records in order. And always remember that “limits may apply.”
“You often reduce your tax bill a quarter or so for every dollar you donate,” according to Trent Hamm in Charity and Your Tax Bill. Hamm shows you how taxes are actually calculated, and how deductions factor in. He also says that “sometimes a donation will drop you into a lower tax bracket.”
Once you’ve had the chance to read the aforementioned articles, I’m sure you will be browsing through different qualifying organizations to donate your hard-earned money. With all that is going on in the world and so many worthy causes out there, deciding who to give to can often cause an inner conflict. One solution is to keep your donations local. One Step Away is a qualifying organization, it’s local, and you can see where your money is going. Not only could more donations to the paper help us bring you a new edition more often, but as you watch each vendor grow and succeed you’ll know your donations brought about such positive change.
Even though you cannot deduct what you donate to an individual vendor, you can still benefit from supporting us. You see us in the stores you also shop in, buying everyday necessities. You’ve seen us in Wawa and 7-11, buying food and coffee. Some 55% of vendors are off the street because of One Step Away, paying rent to local realtors, and using the same electric companies you do. As the money you donate to individual vendors is spent in the same community, that community grows with us. As your community grows, a positive chain reaction is initiated, and you prosper too.