Feeling Charitable? Facts & Figures for Giving
People work hard to earn and save their money, but many give some of it away on a regular basis. According to the Philanthropy Panel Study by the University of Michigan, 55.5 percent of American households say that they make charitable contributions.
And while giving is often done out of simple kindness or a desire to help a favorite cause, there are also personal financial benefits to generosity. Here are a few things to think about when choosing a charity and donating your dollars.
Make sure you agree with how your donations are spent. Consult
Donating household items and clothing is a fairly common form of giving. Be sure to keep detailed records to reap potential tax benefits. Keep a running list of items donated, their thrift shop fair market value, the original purchase price and the donation date. Go to IRS.gov and check out Publication 526 for more complete information regarding contributions.
Choosing a select few charities to support can save you time and increase the impact of your gifts. Writing fewer yet larger checks can make it easier to keep records for tax time. And with a narrower focus, you can become more involved with the charity’s mission and see how your funds are being used.
If you have investments in stocks, bonds or other securities that you’ve held for at least a year, you can donate those that have appreciated in value. This can possibly result in a tax benefit, since there is generally no capital gains tax when appreciated securities are given to a nonprofit. But it’s always wise to consult with your financial planner before the stocks are transferred.
The implications of the Tax Cuts and Jobs Act (TCJA) have many nonprofits concerned that giving will decline in light of the new standard deduction ($24,000 for married couples, $12,000 for single people). If you are close to the deduction threshold, you might explore “stacking” charitable donations with your tax professional. Stacking entails doubling or tripling your contributions in a particular tax year in order to itemize deductions.
Giving for the sake of doing so is a wonderful thing; but it’s also completely ethical to get credit for your generosity. So, be sure to take advantage of the legal benefits of giving. You just may find that you get a lot back – personally and financially – when you pay it forward.