As a holistic fee-only financial planning firm, we want to see people make the most of their resources. By giving time, money or items to charity, you’ve used your resources well and you can make charitable contributions go a little further by claiming the deduction that the government allows.
While there are certainly some people who try to make dishonest claims about charitable contributions in order to offset their taxes, we imagine that there are many more people who simply do not claim any charitable deductions at all. If you are in that second category, ask yourself why you do not claim these deductions. Do you think that it is not worth your time or effort? Or do you feel that it is someone who wrong to “profit” from charitable contributions?
By taking the deduction, you are adding to your financial stability and ensuring that you can continue to assist those in need.
The deadline for including charitable contributions on your taxes for the current year is December 31. This means that if you have receipts and other proof of your charitable contributions for the past year, you can use those to claim a tax deduction. However, if you still have items you want to give or financial contributions to make, there is time.
A balanced approach would include keeping an accurate record of items you have given away to charity or of time spent and gas mileage that counts toward your volunteer efforts.
The following resources can help as you value your charitable contributions:
IRS Publication 526 – Charitable Contributions This covers what you can and cannot deduct, how to keep records and how to report donations and expenses related to volunteer work.
TurboTax ItsDeductible Online This free web-based program helps you track donated items throughout the year, provides resale value and you can import the information to TurboTax.
DeductIt! 2011 This book is for those who would prefer to keep track of charitable donations without using a computer. It also provides a straightforward overview of the Tax Code.