We all know where I am going with this. It seems that every time you turn around there is another business or entity asking for donations. Before you blow the opportunity off you need to realize that donating to non-profits that carry a 501(c)(3) tax-exempt status from the IRS can actually help your bottom line when tax time rolls around.
Organizations that carry this status are more than likely running on grants and donations from individuals and organizations. Every time you give a donation you can keep that record and use it as a write-off during tax season. Some organizations (churches) don’t require the 501(c)(3) tax-exempt status, but all your donations to them are fully deductible as well.
Donations don’t have to be limited to money either – though monetary donations are the easiest to track, record, and later report. Many non-profit organizations will accept all types of donations. Some other types of popular donations include:
- Food
- Clothes
- Toys
- Appliances
- Furniture
- Etc
There are all sorts of things you can donate, most of which will allow you to get a tax write-off. If you donate items other than money, be sure you get a receipt listing exactly what you donated. This will come in very handy when you are reporting taxes. The only thing you can’t write-off is time. In other words you can donate your time to a company, but there is nothing there to write-off.
Remember, to get the full benefits of all that comes with yearly donations, be sure to write down the fair market value of every item you donate (the IRS Publication 561 provides guidelines). For non-cash donations that exceed $500, use Form 8283 to itemize everything that was given. If you only gave money, then you should receive a receipt in the mail from the named organization stating what your yearly donation total was. Simply report that when filing taxes.
Donating to others in need is a great way to not only give to your community, but to also help people in need and get a little something back in return come tax time.