5 tips on how to be charitable this holiday season

It's amazing that it's already December, isn't it? How fast this year went by! as fast as these 5 tips on how to be charitable this holiday season. 

People always say that the most important gift someone can give you is their time and that is our first tip: Give time, not money. You cannot deduct the value of your services but can deduct out-of-pocket expenses incurred in performing the services… like these:

• The cost of a uniform that must be worn while volunteering would be deductible
• Car expenses for travel to and from the charitable activity also qualify for deductions. Instead of keeping track of actual expenses, you can take a shortcut and deduct 14 cents per mile for your charitable driving.

Our second tip is related to payroll deductions, so if you are a Business Owner in payroll you can Consider payroll deductions. These are a good way to spread out donations throughout the year while meeting charitable giving goals. Unlike payroll deductions for health and other benefits, which are made on a pre-tax basis, payroll deduction donations are made with after-tax dollars. Therefore, the donations are deducted from income at tax time.

Have you ever heard that someone's leftovers are someone else's treasure? Nothing could be truer. Our third tip is about this: Give gently used items. Donations of clothing or household items to charity are deductible, provided the items are in good used condition or better. The deduction is limited to the fair market value of the item, not the amount you paid for it. Organizations that accept donations have guides available for pegging the value of donated items. 

There is a free online app called ItsDeductible that you can use to track and value your clothing items.

The great thing about having a credit card is that you can give now, pay later because all contributions charged on a credit card are considered made and deductible in the year the charge is made. Additionally, giving a contribution by check dated and mailed to a charity in 2021 is considered delivered on the date of mailing, regardless of when it is received and negotiated by the charity. Yes, it was our fourth tip.

We leave for our fifth tip your stock, so what happens if you Donate your appreciated stock? A tax-wise giving strategy is to donate stock that has appreciated in value. As a general rule, you can take a full fair-market-value deduction for the donated stock—but do not have to pay capital gains tax on the appreciation in value. You also can Dump depreciated stock. The opposite strategy is true for depreciated stock. By selling the stock and donating the proceeds, you will get two deductions in one: a capital loss on the sale of the stock and an itemized deduction for the donated proceeds.

The most important thing you should consider after making donations is to record your donations. You must have a record for any cash contribution in the form of a bank record, or a written receipt or letter from the charity showing the name of the charity, the date of the contribution, and the amount. 

If you need more information or details you can check the IRS website related to the Charitable Contribution Deductions