Considering Charity? Tax Tips for Before You Donate

As we begin the second half of the 2012 calendar year, it’s a good time to assess spending habits and evaluate the first half of the year.

It’s also a good time to begin considering the end of the calendar year, especially if you plan on donating money to a charity.

Giving USA recently released their 2012 report detailing the last year’s philanthropic efforts in the US, and they indicated that American contributions rose by roughly four percent in 2011. There are many different reasons people make charitable donations. Whether it’s as a showing of support for an organization, religious reasons or simply for a tax deduction, people are continuing to support charities.

If you plan on giving this year, it’s a good idea to plan ahead, and know where your money is going.

With holidays at the end of the year, waiting until the last minute to consider a gift is a risky proposition. But having a dollar amount and the organization(s) you’re considering already established can make giving that gift an easier experience.

And, if you plan to claim the gift on your taxes next year, it’s best to make sure your donation is actually deductible. Here are a few ways to make sure your contribution is deductible.

  • Make sure the organization is qualified. If you aren’t sure, there is a search site set up by the IRS to confirm an organization’s status. Click here to search the IRS database.
  • Check your forms. When filing with Form 1040, you must use Schedule A for your itemized deductions to receive credit for your contributions.
  • Get a receipt. You’re going to need one from the organization for when you include the donation in your itemized deductions.
  • Know the value. If you plan to donate something other than cash, you must assess  item’s fair market value (what the gift is really worth). This is critical when donating items such as art work or an automobile.
  • Consult with a qualified tax advisor. If you plan on gifting to more than one organization, or have items to deduct other than charitable contributions, a licensed accountant is the best source for advice and assistance.

For more information regarding the tax benefits of charitable contributions, check out this IRS website.

Popular Community Bank partners with a number of organizations in the communities we serve as well as operating the Popular Community Bank Foundation, a wholly employee-funded philanthropic organization that awards grant money to deserving organizations all over the country.

Banco Popular North America, its parents, affiliates, subsidiaries, agents, or employees do not provide tax or legal advice. Please consult with your attorney, financial consultant/planner, accountant, and/or tax advisor for advice concerning your particular circumstances. The information contained in this Internet site is for general informational and educational purposes only and should not be construed as professional advice or a legal opinion on specific facts or circumstances. The information or opinions contained in this Internet site should not be construed by any consumer and/or prospective client as an offer to sell or the solicitation of an offer to buy any particular product or service. Links to other sites are for your convenience in locating related information and services.

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