The holiday season has a way of bringing out the charitable giving spirit in people; with so many families in need, it’s natural to want to share your bounty. To help you give successfully, we’ve compiled our savvy tips for charitable giving, from choosing a legitimate organization to documentation and tax deductions. 

Charitable Giving 101: Selecting a Credible Organization

In the U.S. alone, there are a staggering 1.54 million charities to choose from, and not all of them are worthy of your donation. Make sure the organizations you’re considering are registered with the IRS as tax-exempt. Additionally, use helpful tools like Charity Navigator, which rates a charity’s effectiveness based on certain metrics. 

For example, a score of 80 to 100 in the “impact and results” category indicates a cost-effective group where at least 70% of your contribution will directly impact their cause. Whether you are interested in supporting humanitarian efforts in war-torn countries or animal welfare societies in America, Charity Navigator can give you a list of deserving options. 

Donation Documentation

Once an organization has received your donation, it’s important to obtain a receipt or document to use for tax deduction purposes. This communication should generally include the charity’s name, contribution date, and amount received. For noncash donations, like property, refer to the IRS guidelines. 

You can also learn about the IRS’s substantiation and disclosure requirements by carefully reviewing their “Charitable Contributions” literature. Of course, make a physical and digital copy of the necessary documents and store the original paperwork in your filing system.

Claiming Tax Deductions

Charitable giving comes from an authentic desire to help those in need, but altruism can also benefit the donor by reducing your tax bill. To ensure that your documented contributions are claimed, read the most recent information on filing. A good place to start is by filling out a Schedule A (Form 1040) to itemize your deductions. 

For noncash contributions, fill out the 8383 form. Even these resources can be confusing, so don’t be afraid to rely on expertise from a qualified accountant or tax expert. Or, take advantage of DEXSTA’s financial literacy courses regarding taxes on Banzai.

Rely on DEXSTA for Charitable Giving Tips and More

Giving is not only good for the soul; it’s good for your wallet as well! To help you reach your financial goals, explore our community blog, where we share insight on the money moves that matter. Happy holidays!