Today, we recognize #GivingTuesday, a social movement which encourages others to give back by donating time, money or positive influence to a worthy cause that makes a difference. Generous efforts such as donating blood, providing financial support to a local organization, visiting a nursing home, or even helping out at a soup kitchen can touch the lives of many.
Even large organizations such as PayPal have “seized the season” and partnered with its users to celebrate the #GivingTuesday initiative, adding 1% of all donations made through their portal from now until the end of the year.
Since we’re talking about donating to charity, we’d love for you to share with us ways that you will donate! Are you a part of a charity or nonprofit organization who could use some donations to support the mission of the organization? If so, post the group name and information in the comments so other readers can donate!
For tax-exempt organizations, donations are a major component to its success and level of outreach. Thankfully, taxpayers have the ability to maximize their tax savings before the end of the year by giving to a charity and deducting it on their annual federal income tax return.
#GivingTuesday Tax Filing Reminders
With #GivingTuesday being an annual event, there are some reminders that taxpayers should be reminded of as they give money or good to an exempt charity or organization before December 31.
Donations to Eligible Organizations (Only) are Tax-Deductible
Churches, synagogues, temples, mosques, and government agencies are eligible to receive deductible donations. For a complete list of eligible organizations, click here.
Itemize to Claim Charitable Donations
Charitable deductions cannot be made if an individual chooses the standard deduction. Taxpayers must itemize their donations on Form 1040 Schedule A to claim deductions for charitable contributions.
Have Proof of Monetary Donations
Upon making a donation, be sure to receive a bank record or a written statement from the charity/organization to prove the amount and date given. Taxpayers using payroll deductions should retain a pay stub, a Form W-2 wage statement or other proof showing the total amount withheld for charity, along with the pledge card showing the name of the charity.
Donating items such as clothing and other household items come with a deduction amount that is normally limited to the fair market value of the item. These types of items must be in good or better condition to be considered tax-deductible.
Similar to monetary donations, those that donate property must get a written acknowledgment from the charity for all gifts that are worth $250 or more. This statement should include a description of the items contributed.
What Happens After You Donate?
Once you’ve donated and received the necessary paperwork for your deduction, all that’s left to do is simply file your annual tax return. However, tax-exempt organizations have a few more steps to take such as filing their required Form 990 each year.
Exempt organizations are required to file this return to ensure that their organization is not abusing its tax-exempt status. The IRS also utilizes the information reported on Form 990 and makes it available for public information.
Luckily, exempt organizations can handle all of their Form 990 filing needs right here at ExpressTaxExempt with our easy, simplified filing process, and can even instantly share their information with GuideStar, the world’s largest source of nonprofit organization information.
Give, Give, Give!
The ExpressTaxExempt team encourages you to take some time this holiday season and give back in some way in honor of #GivingTuesday. Once again, feel free to comment on ways that you or your organization are helping out today and days to come as well as providing your organization’s information to gain support from fellow ExpressTaxExempt users.