Donation basics to ensure a tax deduction
Donating to charity not only helps others, it can reduce your tax bill - but only if the charity qualifies as a tax-exempt organization.
Checking for qualified status
If you plan on itemizing your deductions on your tax return, make sure the organization you're donating to is designated by the IRS as a 501(c)(3) organization in good standing.
You can find a list qualified 501(c)(3) organizations on the IRS website. Remember, even last year's qualified organizations could lose their non-profit status if they do not submit their annual tax filing!
Is it a good charity?
Ensuring a tax-exempt status is not your only step. You should also conduct research on your charitable organization. There are many websites that evaluate organizations, how they spend their funds, and how efficient your donation is being used. So check out your charities on sites such as Charity Navigator, Charity Watch and BBB Wise Giving Alliance.
Get your documentation right
Here are a few other key requirements if you want to deduct your charitable donations:
You may be able to reduce your tax liability by boosting your donations late in the year and pushing your total itemized deductions amount over the standard deduction threshold ($12,000 single/$24,000 joint).
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