Donate to Charity

June 12, 2022
|In News
|By Bright Side Foundation

You may donate to charity money or property.

Research

Before you donate money or goods, research the charity. Be certain that the charity is real. Several agencies offer information to help you evaluate the operation of charities:

The Internal Revenue Service offers tax tips for donors.
Check a charity’s 501(c)3 status with the IRS exempt organization database. A charity must have 501(c)3 status if you plan to deduct your donation from your federal taxes.
The attorney general in your state often licenses charitable organizations. They may also have records of complaints about charities.
The Better Business Bureau offers reports about how large charities use their funds.

Types of Donations
Monetary
Make financial donations by check or credit card. These payment methods can help you keep a record of your donations. They can also protect you from charity scams.

Goods and Personal Property
Some charities accept non-cash donations, such as clothing and household items. Donate items that are in good (or better) condition. Keep a list of the items you donated for your taxes.

Vehicles
You can donate your car, truck, boat, or other vehicles to a charity. An organization may give a donated vehicle to someone, use it for operations, or sell it at an auction. You need to transfer the title to the charity if you donate a vehicle. Also, remove license plates and registration documents before you donate the car.

Other Property
You may also give other types of items to charities:

  • Art
  • Jewelry
  • Stocks
  • Real Estate
  • Patents

The value of these items may need an expert appraisal. The values could depend on offers to buy the items and the timing of the donation.

Charity Scams

Some scammers set up fake organizations to take advantage of the public’s generosity. They especially take advantage of tragedies and disasters.

How to Report Charity Scams
Your state consumer protection office can accept and investigate consumer complaints.
File a complaint with the Federal Trade Commission (FTC). The FTC does not resolve individual matters. But it makes tracking charity fraud claims and sues companies on behalf of consumers.
Contact the National Center for Disaster Fraud if the fraud is because of a natural disaster.
The Do Not Call Registry doesn’t apply to charities. But you can ask an organization not to contact you again.

How to Protect Yourself From Charity Scams
Follow these tips to detect common charity scam tactics:

Do
Check out the charity with your state consumer protection office or the Better Business Bureau.
Verify the name. Fake charities often choose names that are close to well-established charities.
Don’t
Don’t give in to high-pressure tactics such as urging you to donate immediately.
Also, don’t assume you can get a tax deduction for donating to an organization. Use the IRS’s 501(c)3 organizations database to find out if it has this status.
Don’t send cash. Pay with a check or credit card.
Federal Tax Deductions for Charitable Donations

You might be able to claim a deduction on your federal taxes if you donated to a 501(c)3 organization. You must file a Schedule A with your tax form to deduct donations. With proper documentation, you can claim vehicle or cash donations. Or, if you want to deduct a non-cash donation, you’ll also have to fill out Form 8283.

How Much Can You Deduct?

The amount of money you can deduct from your taxes may not equal the total amount of your donations.

  • If you donate non-cash items, you can claim the fair market value of the items on your taxes.
  • If you donated a vehicle, your deduction depends on if the organization keeps the car or sells it at an auction.
  • If you received a gift or ticket to an event, you could only deduct the amount that exceeds the value of the gift or ticket.
    Note: Limits on cash and non-cash charitable donations have increased or been suspended.

Keep Records of Charitable Donations
To claim deductions, keeping records of your donations to charities is important. You may not have to send these documents with your tax returns, but they are good to keep with your other tax records. Common documents include:

Federal Tax Deductions for Small Business Charitable Donations
Small businesses can receive a tax deduction for charitable donations (PDF, Download Adobe Reader). The IRS has specific reporting requirements when a small business donates:

  • Non-food inventory
  • Food
  • Intellectual property

You won’t receive a tax deduction for donating services. But you may be able to deduct expenses related to the donation, like travel or materials.