As the season of giving comes into full swing, the taxable year is also drawing to a close, making it necessary to be sure all your finances are in order so you can file your taxes next year.
To help you make the best holiday tax-deductible donations, our accountant at AA Tax & Accounting Services, LLC has tips on how to make your charitable giving count.
Charitable Contributions And Tax Deductions
Anyone can call themselves a charity but not every organization qualifies for tax-exemption, which means you can’t deduct your donation from your taxes. To qualify, the charity needs to be an IRS-registered 501(c)3 organization. Generally, a registered charity will state their status to make the donation process easier, or you can work with our accountant to determine what organization is right for your donation.
The tax-deductible donation you make does not necessarily have to be made in cash. Some other types of donations which are tax-deductible are:
- Stocks donations
- Appreciated assets such as antiques and artwork
- IRA transferred donation
- Real estate donations
If you have any concerns about the tax-status of a charity, you can look them up on the IRS, using their Tax Exempt Organization Search tool.
What Changes In The 2018 Tax Laws Means For Your Charitable Deductions
With the 2018 changes to the tax laws, the standard deduction has almost doubled for all types of earners. This change can make itemized deductions—like charitable donations—less useful on your taxes. However, as you can generally deduct up to 60% of your adjusted gross income when you donate to a qualified charity, it may still be worth it to your taxes if you are in a position to donate enough to impact your taxes.
Make Sure Your Charitable Donations Still Count
If you want to check that your donation will be able to impact your taxes, you will need to consider your tax bracket and other deductions.
For example, say you are married filing jointly, and you fall into the 22% tax bracket. Your standard deduction is $24,000, so your itemized deduction will need to be more than that to make it worthwhile to itemize your taxes. Some of the most common itemized tax deductions are:
- Charitable donations
- Mortgage interest deductions
- Dental and medical expenses
- Local and state taxes
So, depending on how close your other itemizable deduction bring you, your charitable donation amount may be influenced.
For more tailored, hands-on help with your taxes and accounting needs, contact us. Our accountant will be happy to consult with you.