Give the gift that keeps on giving
If you’re like me, trying to figure out what to get everyone on your holiday gift list is no simple thing. I mean, does my husband really need another tie? Um, no.
And let’s face it. It’s been a tough year and there are a lot of people out there who could use some help. So instead of giving conventional gifts this holiday season, I’ve decided to give the gift of donations to charitable causes. And here’s why I think you should, too.
You can donate a gift to charity – make a charitable contribution in honor of someone you love for a cause they feel passionate about and you get the tax deduction. Talk about a gift that keeps on giving. Your best friend may be passionate about children’s literacy, or animal rights. You can give a contribution in her name to an organization that supports that issue and she gets a gift she’ll adore (and be relieved you didn’t send fruit cake), the charity you choose will help make the world a better place, and you get a tax break. Everybody wins.
If you don’t want to choose the charity yourself, you can you can give a gift certificate so your dad or co-worker can choose what charity to donate to. Check out www.justgive.org where you can purchase a gift certificate for any amount. And yes, you’re still the one who gets the tax deduction.
For me, this is a really great option because it means I don’t have to fight the crowds at the mall. And apparently, I’m not the only one who thinks so. A recent Forrester Technographics survey shows that online giving to non-profits will rise substantially this year. The survey estimates that more than 111 million Americans will give through Web sites, a huge increase from the 89 million who did online giving last year.
If you choose to make a cash donation as a gift in someone’s name and you want to deduct it on your tax return, you will need a canceled check, bank record or a receipt with the charity’s name and donation amount. I always recommend using checks or a credit card for just this reason. When it comes to taxes, documentation counts!
Maybe I still haven’t convinced you that ending the traditional a Rudolph the Reindeer sweater gift exchange with to your sister is not the best idea. Well, consider this: One of the great things about giving the gift of charity is that you can get your kids involved. I have 7-year old twins. Getting them to give up their stuff can be a challenge. But I believe one of the best lessons I can teach them is the importance of giving and helping others. It’s easy to do. Have your kids round up gently-used toys and books that other little boys and girls will be able to use and donate them to your local Goodwill or Salvation Army.
Remember that when you donate used clothing, toys or household goods, you get to write-off the item’s fair market value, which may be considerably less than what you actually paid. I like ItsDeductible Online. It’s free and gives you the fair market value of commonly donated items.
And of course, one of the most valuable and precious gifts you can give is the gift of time. Get friends and family involved for a day at your local food bank, hospital or animal shelter. You can deduct some out-of-pocket expenses you incur to do your good work, including what you pay for materials, supplies, uniforms and parking.
But time is running out if you want to save on this year’s taxes and get your shopping done before New Year’s rolls around. You need to purchase your gift of charity by December 31, 2009 if you want to write it off on your 2009 return. If you charge the donation on your credit card, the write-off is claimed in 2009, even if you don’t pay the credit card bill until 2010.
The bottom line is that if you itemize deductions on your tax return, you can write off your charitable contributions, whether you give the gift of charity or donate money to an animal shelter, stocks to your alma mater, or clothing to an overseas relief effort. For your donation to be deductible, it must go to a non-profit group that is approved by the IRS. If you’re not sure whether the group you want to help is approved by the IRS to receive tax-deductible donations, check online at IRS Search for Charities.
Making a charitable contribution in honor of someone you love is a wonderful way to give thoughtful gifts that your friends and family will always remember. The fact that you get a tax deduction is just icing on the cake.