November is when we all start thinking about charitable giving, especially if we haven’t done a lot of giving throughout the year. It’s the time of year when we all think about how to give back – how to help others in our community, our state, our world.
Many people make donations to charities whose work they support, but if you are planning to take a tax deduction for your gift, you must have the proper paperwork. (See our past post on the ins and outs of charitable giving.) Assembling the right documentation can also be tricky because the requirements vary based on whether the donation is cash and on the value of your gift. If you donate less than $250 in cash, for example, a canceled check, credit card statement or similar record may be sufficient, but if you give more, you will need a written acknowledgement from the charity. An additional tax form—and possibly an appraisal—may be needed for non-cash donations, depending on their value. Of course, the organization itself must also qualify as a charity under IRS rules.
So if, at tax time, you are one of many of our clients who get an email from us asking for confirmation on your backup documentation, please know we’re asking for your benefit! We want to make sure that you’re covered in the event of an IRS audit. (Don’t worry – we’re knocking on alllll the wood as we type this!)
We can offer advice that will make it possible for you to fund the causes you believe in and qualify for the deductions you deserve. We can also help you incorporate charitable giving into your long-term tax and estate planning. Be sure to contact us with all of your questions on charitable giving or any other financial concern.
Cheers to giving season, Giving Tuesday, and all our favorite charities.