The end of the year is a perfect time to give back to others and your community. Whether you’re an individual or a business owner, charitable donations benefit the recipient and provide tax advantages to the donor. Tax deductibility often incentivizes individuals and corporations to give more vigorously to philanthropy, which is essential. Here are some reasons why end-of-year giving may be a comprehensive strategy.
To help manage the current year’s tax liability.
Year-end donations and tax savings have the added advantage of allowing you to manage your tax liability for the current year if made by December 31st. Donations made by checks or credit cards must clear the donor’s control, whether delivered or mailed, by the deadline.
To end the year positively by doing good for others.
Moreover, year-end donations significantly impact communities in need and reduce your tax liabilities. Donors fuel efforts that bring about societal improvement and community development by channeling resources toward targeted areas such as education, healthcare, poverty alleviation, environmental preservation, and many others. Giving helps create a more equitable society—a win-win situation for all parties involved.
Tips to help you get the most from your donation
#1- Validate the charity is IRS-qualified.
In making year-end donations and tax savings, it’s crucial to ensure the charity or non-profit organization you’re donating to is recognized by the IRS as qualified. To be qualified, the organization must operate exclusively for charitable, religious, educational, scientific, or literary purposes. The IRS website provides a comprehensive list of recognized charities, and tools like the IRS’s Tax-Exempt Organization Search can help verify an organization’s status before you donate.
#2- Keep detailed donation information.
You must keep detailed records of all donations to claim your tax deductions. For any contribution made, request a receipt with the charity’s name, the donation date, and the amount given. Meanwhile, depending on the value of your donations, different types of records and procedures may be required.
In conclusion, as we approach the end of the year, consider making charitable donations and tax savings that can help lower your taxes and positively impact your community. Remember to conduct adequate research to help ensure that your chosen charity qualifies for tax deductions and maintain thorough records for tax filing purposes.
SWG3878283-0924B Disclosure: This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice and cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.
Our family financial services firm, August H. Velten & Associates, has been in business for 12-years in Melbourne, FL. August Velten (CLU) is a 40-year veteran of the Financial Services industry. August is a former instructor for the Life Underwriter Training Council and once occupied the legislative seat for the Maine Association of Life Insurers. In Brevard County, you may have seen him on local access TV or read one of his articles in a local area magazine. Jessica Waterhouse, August’s daughter, left her own practice to join the firm in 2019. Jessica is a Florida licensed insurance producer, securities licensed (Series 65), a long term care specialist (CLTC) and holds certification as a National Social Security Advisor. Both August & Jessica are instructors for financial literacy workshops in both Brevard and Indian River County offering education in Social Security and Financial Planning. Contact the office today to schedule an introductory meeting or review of your current financial plan.
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