Now that the holidays are in full swing, you may be evaluating your commitments to charities and thinking about year-end donations.
How can you make the most of your end-of-year charitable donations, and avoid scams and fake charities?
These four steps can help you give wisely as 2017 comes to a close.
Step 1: Confirm the charity is legitimate by searching with the IRS’s tool, Exempt Organizations Select Check. Cross-reference by asking the organization for its employee identification number, and then searching the same database for it.
Step. 2: Research the charity’s financial health. The Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Watch, GuideStar and Charity Navigator offer guidance on how charities spend money. Many Americans want to understand what portion of a donation goes to overhead, versus the cause itself.
Step 3: Determine how to donate. Options include donations of goods, checks, wire transfers and credit card payments. Americans can also donate appreciated securities and write off the current value of a stock, or make donations directly from their IRAs, though some rules apply to the last case. Contact us if you’d like to look at tax-smart giving options specific to your investments here at A & I Financial Services.
Step 4: Keep good records. For any donation valued at $250 or more, the IRS requires a bank record, payroll deduction or written communication identifying the organization, the date and amount of the contribution and a description of the property.