5 Ways to Give Smart When Making Year-End Donations

5 Ways to Give Smart When Making Year-End Donations

The end of the year has arrived, which means December 31st is the last day to make tax-deductible donations. Here are a handful of strategies to consider if you want to boost your charitable contributions for 2018:

  1. Audit-proof your claims. The IRS imposes strict substantiation rules for charitable donations. In fact, you're required to keep records for all monetary contributions, no matter how small. The best approach is to obtain written documentation for every donation.

  2. Charge it. The cutoff for 2018 donations includes charitable payments charged before the end of the year. This means even online contributions using a credit card, so you can claim a deduction for donations made as late as Dec. 31.

  3. Give away appreciated stock. Generally, you can deduct the fair market value (FMV) of capital gains property owned longer than one year. For instance, if you acquired stock 10 years ago for $1,000 and it's now worth $5,000, you can deduct the full $5,000. The appreciation in value is not taxed.

  4. Sell depreciated stock. Conversely, it usually doesn't make sense to donate stock that has declined in value, because you won't receive any tax benefit for the loss. Instead, you might sell the stock and donate the proceeds. This entitles you to a capital loss on your 2018 return, plus the charitable deduction.

  5. Clear out the clutter. Tax laws permit you to deduct charitable gifts of used clothing and household goods that are still in "good, used condition or better: at Fair Market Value. Think twice before discarding items that can be donated to charity!

Call us at 805-496-2828 if you have any questions about how to maximize your charitable donations.

TAX TIP TUESDAY: Taking Business Clients Out for the Night?

TAX TIP TUESDAY: Retirees, You Still Owe Taxes