Along with presents and time spent with loved ones, the holiday season is also filled with generosity. Nonprofit organizations typically receive around 30% of their annual giving in December, with as much as 10% given in the last three days of the year. Clay Rogers with Teamwork Financial Group offers tips on how to make your year-end donations do the most good for you and your community.
Is giving during the holidays different?
Giving during the holidays is actually no different from giving throughout the rest of the year. It is beneficial for the organizations at any time, but most nonprofits see a large amount of yearly donations come in at this time. Many people are more inclined to do it during this season due to “holiday spirit,” end-of-year compensation packages, and many other reasons.
Who can make donations?
Anyone can make year-end donations, even businesses. High earners can include their giving in their itemized deductions. If you take the standard deduction (like the majority of Americans), you will not see a tax advantage, but this doesn’t mean giving will be a “waste” by any means. All giving is extremely beneficial for the selected charity even if the donor doesn’t get a tax benefit.
Depending on their age and the amount in tax-deferred plans like a traditional IRA, some taxpayers can direct their IRS-required minimum distributions to a charitable organization via a qualified charitable distribution.
Which organizations can I give to?
From a tax standpoint, a nonprofit must usually be registered with the IRS under section 501(c)(3) for a giver to deduct their donations. The donor must also meet some requirements, including the type and amount of a donation in relation to a taxpayer’s adjusted gross income, if services were rendered to the donor for the donation, if an item was given for the donation, and other qualifiers that determine if and how much of a donation is tax-deductible to an individual.
Clay Rogers
Investment Advisor Representative
Clay is a full-time team member of Teamwork Financial Group focusing on tax preparation and bookkeeping for client companies. He is outside when not at the office, often found hunting, fishing, or snowboarding.
Top questions for year-end donations:
Will this help me from a tax standpoint either through itemized deductions or qualified charitable distributions?
What type of donation is most beneficial for you and the organization?
What organization do you want to donate to and why?
Teamwork Financial Group
Our mission is to help each of our clients feel confident about their futures for as long as they live by empowering people financially to grow, preserve, and give. Your peace of mind is our ultimate goal.
210-687-1333
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