#GivingTuesday – Decrease Your Taxes by Donating Gifts and Cash
Washington, DC., November 27, 2017 – With Puerto Rico and parts of Florida, Texas and California still recovering from natural disasters, the National Association of Enrolled Agents encourages everyone to make a charitable contribution on #GivingTuesday, November 28. By adhering to the following tax tips, you can maximize the impact of your donation while minimizing the impact to your pocketbook:
- First, the organization to which you donate must be recognized by the IRS as tax-exempt. One way to be certain is by checking “EO Select Check” on the IRS website. This tool will search for your organization and let you know if IRS considers it eligible. You may also confirm an organization's status by calling the IRS at 1-877-829-5500, but using the Internet will probably save you wait time.
- Another great resource is Charity Navigator. They provide independent evaluations of more than 9,000 charitable organizations you may wish to donate to. They also provide lists of specific charities working to provide aid to those impacted by the recent natural disasters that have caused devastation across the U.S. For example, click on these links to access lists of highly-rated organizations providing Relief for Puerto Rico and Areas Impacted by Hurricane Maria, the California wildfires, Hurricane Irma and Hurricane Harvey.
- You must itemize your taxes in order to claim the deduction – taking the standard deduction will not allow you to reduce your taxes by the value of your contributions.
- If you’ve given a financial gift with no goods or services exchanged, you need to be able to furnish a written statement from the charity. The statement must show the name of the charity, the date and the amount of the contribution. If you’ve given via payroll deductions, you must provide documentation from your employer, such as a pay stub or a Form W-2 wage statement.
- With the door-to-door service supplied by many charities including the Military Order of the Purple Heart and Big Brothers, Big Sisters of America, you can book a pick-up at your home through the Internet. Items must be in good condition and you must have a receipt from the organization. If your total deduction for all noncash contributions for the year is over $500, you must complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return. Make sure to document and photograph all items donated.
- If you are purchasing items to benefit a charity, keep in mind that only the difference between the price you paid and the fair market value is deductible. If you charge your purchase or donation to a credit card during 2017, it will count for 2017 taxes – even if you don’t pay your credit card bill until 2018.
A licensed tax professional can make sure you are taking advantage of every credit and deduction to which you’re entitled. Don’t leave money on the table. Find a federally-licensed enrolled agent in your area via the “Find a Tax Expert” directory at www.eatax.org.
About the National Association of Enrolled Agents
The National Association of Enrolled Agents (NAEA) has been powering enrolled agents, America's tax experts®, for more than 45 years. NAEA is a non-profit membership organization composed of tax specialists licensed by the U.S. Treasury Department. NAEA provides the networking, educational opportunities, programs and services that enable enrolled agents and other tax professionals to excel beyond their peers. Enrolled agents are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. To find out more, visit www.naea.org and follow NAEA on Facebook and Twitter.