Charitable giving is always big in December.
We’re feeling the holiday spirit and we want to give to those who are less fortunate, but we also want to make sure our donations are recorded by Dec. 31 so that they’re deductible on our tax returns.
Rather than bunch up your giving at the end of the year — when money is probably tight anyway because of all those presents you’re showering on those you love — consider a giving strategy that lasts throughout the year.
Charities are more than happy to take your money anytime. They certainly need support through the year, not just at holiday time.
These days, many charities accept plastic. You can arrange for a charity to automatically deduct a monthly donation from your checking account, or to charge your credit card on a regular basis.
You’ll rack up deductible donations, with a paper trail for the IRS, and you’ll be spreading the love all year long.
Do your research
Of course, you want to choose a charity that supports a cause that’s important to you — whether it’s to research a disease, provide food and clothes to the needy, or to help homeless animals. You want to make sure the charity uses the majority of your donation to do good works rather than to pay administrative costs. For charity research, check out sites such as JustGive (justgive.org), CharityNavigator (charitynavigator.org) and the American Institute of Philanthropy (charitywatch.org).
You also should do your own research. Ask the charity if it’s registered to solicit funds in New Jersey. Certain religious and educational organizations, and charities that raise less than $10,000 annually are exempt, according to the Division of Consumer Affairs. Also, call the Consumer Affairs’ Charities Registration Hotline at (973) 504-6215, or visit the Charities Registration page at njconsumeraffairs.gov.
Ask what percentage of contributions is used for management and administration expenses, and what percentage will directly help those in need.
Give your stuff away
If cash isn’t plentiful, you can still help those in need by donating goods — from clothing to furniture to medical equipment and more. Clean out your closets, attic and basement and give away unwanted items. Before you do, make a list of the items you’re donating and research the fair-market value, or ask for your tax preparer’s help.
If you’re donating any items valued above $5,000, get an appraisal so you can back up your deduction. Try the Appraisal Institute (appraisalinstitute.org) or the American Society of Appraisers (appraisers.org). And make sure you get a receipt from the charity, too. The amount of your deduction will depend on your tax bracket and how much you give.
If you give your time
Charities need money, but they also need volunteers. If you decide to give your time, you may incur some deductible expenses on behalf of the charity. You can deduct your mileage for using your vehicle in service of a charitable organization. The rate for 2011 is $0.14 per mile, according to the IRS website (irs.gov).
You also can deduct parking fees, tolls or public transportation expenses incurred while doing volunteer work or dropping off donated goods.
If you host or organize a charity fundraiser, there are other costs you may be able to deduct. For example, the cost of hosting the party, advertising, telephone costs and supplies, such as stamps and envelopes, may be deductible.
Just make sure you save your receipts and get written acknowledgment from the charity, just in case the IRS asks.
Staying close to home
If you want to help those close to home, including the still-suffering victims of Hurricane Irene, consider:
• The Red Cross: (800) RED-CROSS (733-2767) or visit redcross.org.
• The Governor’s Office of Volunteerism at (609) 633-9627 or (609) 984-3470 or visit volunteernewjersey.org.
• The Salvation Army: (800) SAL-ARMY (725-2769) or visit salvationarmy.org. You can make an automatic $10 donation by texting the word “storm” to 80888.