Ways to Track Your Charitable Donations
Charitable donations are one of the most under-reported tax deductions. With so many things going on in your daily life, it is easy to see why people have trouble keeping track of their charitable donations. And, once April rolls around, it is very difficult to piece together exactly what organization you gave to, when you gave, and how much your donation was for.
There are some things you can do to help track your donations and make the most of your tax deductions this year. Do not miss out on this opportunity. Put a little time into the process now and you will see the payoff in April.
1. Electronic Spreadsheet
If you are someone who does a lot of work on a computer, then a spreadsheet tool can be an excellent tool to keep track of your annual charitable donations. Some tax software offers this free of charge while there are many websites that ask you to pay for a tracking tool. Keep in mind that this tracking mechanism can be straightforward and simple, so there is really no need to pay for it. You can always use a tool like Microsoft Excel or Google Docs to build your own document that works for you. The key information you want to keep track of is:
- Date of donation
- Amount or value of donation
- Name of charitable organization
- What exactly was donated (money, household items, etc.)
- Whether you kept a receipt
2. Central File for Receipts
Regardless of whether you use an electronic spreadsheet to keep track of your donations, you will also need to file away the receipts that you receive from the charitable organizations. This is very important. You may receive a letter acknowledging your donation or a less formal itemized form that allows for the organization to sign off. These receipts are important back-up documentation should the IRS ask any questions about your deductions. We suggest starting a new file or folder each January that you keep in a central location in your home. Stuff it with this paperwork so it will all be together when it is time to work on your taxes.
3. Canceled or Duplicate Check
If you write a check to a charity, you can always track down the check through your bank if needed. This is a great back-up method if you cannot get your hands on an acknowledgement or receipt, but should not be used as your primary method of tracking.
A charitable donation is a great investment into an organization that you believe in. It will help those who benefit from the organization and will also give you the personal satisfaction of knowing that some of your hard earned money was used to help others. Many charitable donations are tax deductible, especially if you keep the appropriate paperwork on hand for your annual tax return. So, they benefit you as well. The key to making the most of this positive investment is to keep track of all of your donations throughout the year, so that when tax time rolls around, you can deduct all possible donations.
If you have a pressing question about your taxes or want to know how you can get the biggest refund possible, contact Success Tax Relief today.