Give and Get Back: Tax Deductible Donations

Hi Money Masters,

With Thanksgiving a few days away, we are all probably focusing on the many blessings we have. With this grateful feeling also comes a sense of social responsibility and communal support. While we are preparing our turkey dinners and various side dishes and desserts, we think of those who are in need and we ask ourselves, “What can I do?”

This question is often answered in the form of donations to charitable organizations. When we make these offerings, we are supporting our communities, our neighbors, our country and our world. It is a selfless act. But did you know that your donation could be a benefit to you as well by being tax deductible?

Not all donations will qualify. There are limits, specifications, etc. There are different types of donations and a process for claiming deductions. 

Types of Donations

Monetary – a donation in the form of money

Goods – donated toys (new or used), clothing, food, a vehicle 

Services – mileage driven for travel for working with a charity 

Documentation

You will need proof of your donation. This proof must be “official”. A receipt or letter from the charity or a bank record of the transaction are considered official documents. 

If you volunteer your time with a charity you can track your vehicle’s mileage from the travel, not the actual time spent. 

There are different forms you will need to complete and attach with your taxes depending on the amount or value of a donation. 

A discussion with your accountant can get you on the right track for deducting your donations. Giving during the holidays and throughout the year as well provides an opportunity to support those in need. It’s just an added bonus that it could provide some tax relief as well! If you’d like to read more about tax deductible donations check out this article from TurboTax.

Happy Thanksgiving to you all!

-Helen