We know you expect no reward from your generous donations throughout the year, but we believe you deserve to get a maximum refund from your Tax Return, so you can continue being even more generous year after year. It is easy to apply the your charitable donations as a tax deduction and maximize your refund by keeping the following tips and tricks in mind.
Keep a record of your monetary gifts. When donating clothes, furniture, or other items, ask for a receipt. Your church or other organization will issue a thank you or ledger of contributions. Keep all of these records. Visit our Client Center on our website for a list of “Resale Values for Donated Items” to keep record of the value of your donations.
If you are not sure whether your gift qualifies as a deduction, visit the IRS website to view a list of guidelines as whether the organization you donated to is a qualified organization. Keep in mind some of the following facts:
- Individuals are never qualified for deductions. If you are considering gifting to an individual, consider another option that will benefit both you and the giftee.
- Charities will tell you if they have received a 501(c)(3) tax-exempt status. Exceptions are churches and other religious organizations.
- If your contribution entitles you to merchandise or other benefit with a monetary value, you can only deduct the difference between your contribution and the fair market value.
- You can deduct the fair market value of any physical property you donate as long as you donate to a qualified organization. For example, when getting rid of a car or other large item, research organizations that will qualify you for a tax deduction.
You will only receive a deduction from your donation if you itemize your deductions. If you take the standard deduction (for the 2022tax year via the IRS: $6,100 for individual filers and $12,200 for married filing jointly), your donations will be not counted. If your deductions are higher than the standard, you will itemize and therefore your charitable donations will be included. However, whether or not you itemize, it is always a good idea to maintain good bookkeeping practices.
Ask your Tax Preparer for more information of whether itemizing your deductions will benefit you. To speak with us to learn more, contact the office, (425) 242-0636, or via email, office@phd-tax.com. Whether or not you benefit on your tax return, your charity of choice thanks you!
