4 Things You Can Donate This Holiday Season
There are many ways you can give back this holiday season, but did you know certain gifts to certified nonprofit organizations can qualify you for additional tax deductions? Here's a list of four things you can donate and claim as a deduction when filing your 2017 income taxes.
*Pro-tip for all charitable giving: Always ask for a receipt, regardless of the type of donation. It’s important to itemize your deductions with accuracy in case of a potential audit from the Internal Revenue Services (IRS).
1. Cash. A monetary donation to any qualified nonprofit organization, but you must have written acknowledgement of your contribution. Always ask for a receipt when making a monetary donation if it’s not provided.
Want to make yearly donations a habit, but don’t want to empty out all your disposable income at once? Open holiday savings account! Auto-pay can be selected and you’ll always be contributing cash throughout the year in order to donate to your favorite cause.
2. Vehicles. Any vehicle such as a car, truck, RV, or boat can be a wonderful gift to any nonprofit, it will generally be sold to purchase high priority resources. Many nonprofit organizations, such as Habitat for Humanity, Goodwill, and Make-a-Wish Foundation make donating a vehicle easy.
Note: When donating a vehicle, you can claim the value for the vehicle at which the nonprofit sells it. For example, if the Kelly Blue Book value of your car is set at $4,000, but it is sold for only $2,500 at auction, your deduction is $2,500.
3. Furniture. If you’re planning on remodeling your home or updating the décor and furniture, consider donating those larger ticket items! From gently-used sofas, chairs, entertainment centers, to lighting fixtures and countertops, these are valuable items to donate to any nonprofit organization that accepts them. Certain groups, like the Habitat for Humanity ReStore, will resell most items that are in good to excellent condition.
When donating non-cash contributions, you may be required to fill out a form 8283. As the taxpayer making the non-cash donation, make sure to consider the overall value of the item first—it will be your responsibility to fill out the itemized donation receipt to keep with your records. Questions about your donation? Make sure to consult your tax advisor.
4. Out of Pocket Charitable Expenses. Planning on traveling in order to volunteer with your nonprofit of choice? The cost of transportation and travel expenses, as well as uniforms and/or supplies used in the performance of your services for volunteering can also be itemized on your tax deductions. As mentioned above, make sure to keep receipts for every deduction taken.
Looking for other ways to save money and meet your financial goals? Visit our Resource Center to get more guides on budgeting, credit management, investments, and more!
Those are our tips on getting the most back out of giving. How do you give back to your community during the holiday season? Tell us in the comment section below.