5 Ways to Track Your Charitable Donations
There are many important motivations for annual charitable giving. Your passion and willingness to help a non-profit organization can be critical to its ability to serve and stay open. Your charitable donations can also be a key deduction on your annual tax return. Sound like a win-win situation? Millions of taxpayers each year think so: it is estimated that Americans donate more than $300 billion to charity each year.
Keeping tracking of your charitable donations throughout the year can be cumbersome and not as easy as you might think. Now is the time to put a system into place to help you stay organized so that once tax time rolls around next year, you will be ready to make the most of all of those important deductions!
1. Always Get a Receipt
When you make a donation to charity, make sure that you get documentation of your gift. This is the easiest way to be sure that you will have the documentation necessary to deduct it at the end of the year.
2. Create an Organizational System
As you get receipts throughout the year from your donations, make sure that you have a system for keeping track of them. You can keep a paper file near your computer or you can scan them into a computer and keep electronic files. You can even put them in a drawer. The key is to keep all of your receipts in one place so that they are together when it comes time to complete your taxes.
3. Document the Value of Non-cash Donations
You can donate household items, old vehicles, and clothing to a non-profit and deduct this on your annual return. You will want to make sure that you document the value of each of these items so that you know how much to deduct. Not sure how to come up with a value? You can deduct an amount that equals what is considered fair market value for that item. So you may want to do research on this before you donate. If you donate property valued at more than $5000, you will have to get a written appraisal of the item’s fair market value.
4. Watch the Calendar
Your donations in one calendar year count on your tax return. So, you can deduct what you donated in calendar year 2015 (January-December) when you file your taxes in April of 2016.
5. Appreciated Assets
You get a double bonus when you donate property that has increased in value. You can deduct the fair market value of the item plus avoid capital gains taxes if you owned the item for more than a year.
Need Deduction Advice: Contact Success Tax Relief
If you still have questions about potential deductions or overall tax strategies to keep money in your pocket, give Success Tax Relief a call at 1-877-825-1179 today or contact us here and we will get started. You do not have to go through this alone. Our team of tax professionals is standing by to help you solve your tax problems and take the burden off of your shoulders.