Maybe the idea of making a donation is new to you this year. Or, perhaps you donate regularly. Either way, making charitable donations certainly does have benefits for you, the charity, and maybe even next year’s tax bill.
For starters, 72% of all contributions to charities come from individuals like you. Nonprofit organizations depend on all of us to balance their annual budgets. So when you decide to make a donation, know that you could be making that organization more financially viable as the year comes to a close. It’s nice to feel like you’re making the world a better place too.
Because a year-end donation can potentially reduce next year’s tax bill, make certain that the organization has legitimate tax-deductible status. Once you make the gift, be sure to collect a receipt with the amount, date, and organization name. Keep these until tax season. You’ll be unable to claim a tax deduction without the proper records. Check in with the IRS or your accountant about how much you’ll be able to claim for the donation.
Giving is good for your health
Need another reason to make year-end charitable donations? How about the good feelings you’ll reap? Researchers have shown that making donations actually activates our brain’s pleasure center. This can lead to releasing endorphins and eventually lowering stress. We all need less stress during the holiday season!
Tips for making wiser year-end donation decisions
- Make certain the charity is a legitimate nonprofit by finding it on the IRS Select Check Tool.
- Research potential matching programs to increase your original contribution.
- Check to see what percentage the charity uses for programs versus overhead.
- Keep records of the date, donation amount, and charity name – you’ll also need to keep a receipt or acknowledgment letter from the organization.
- Avoid charitable giving scams by ensuring you initiate the contact with the nonprofit – read more in How to Spot Stranger Scams.
As the year winds down, be sure to think about making a donation to a worthy cause. There’s never been a better time.
Why do you give to your favorite charities? Share below.
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