'Tis the season for giving! There's a reason people make donations toward the end of the year, and it’s not just because donations give you a tax break (although it helps). The holidays are about the altruistic side of humanity. Taking care of family and friends and giving to others is the focus of the season.
But, before you make a monetary end-of-year donation or donate physical items this holiday season, there are some things you should know.
The IRS Has Guidelines for End-of-Year Donations
Not all donations are accepted by the IRS, so it’s important to make sure your end-of-year donation is actually tax deductible before you try to claim it when you file your taxes.
If you plan to donate clothes or household items, they must be in good condition or better to be an acceptable IRS tax deduction. This includes:
- Furniture and other home furnishings
- All clothing
If the items you are donating value $500 or more, they don’t have to meet this guideline so long as you have documented appraisal of the donation to submit with your taxes.
Regardless of what you donate, if your end-of-year donation is valued at $250 or more, you’ll need to get written documentation from the charity that describes the contents of the donation. Check out our Donation Valuation guide to see list of typical ReStore items at suggested range values for determining income tax deductions. The documentation should also have the charity’s name and address as well as the date the donation was made.
When you donate money, things are actually a little easier. You should always get a receipt whenever you donate money (or items), no matter how much the donation is. But, if you didn’t get a receipt, you’ll need a bank or credit card statement that shows the amount of the donation, the date the donation was made, and the name of the charity.
If your donations are deducted from your paycheck, you’ll need your paystubs or a W2 statement from your employer with the total amount of the donation. You’ll also need the pledge card that shows the name of the charity to which you made the donation.
Reminders for End-of-Year DonationsThe IRS has a few reminders for those who want to make end-of-year donations:
- Donations are only deductible in the year they were made. So, if you donate $250 to Habitat for Humanity on December 25, 2018, you can claim the donation when you file your 2018 taxes. If you make a donation by check, be sure to mail the check before the end of the year to ensure you can claim it when you file. Anything that is post marked with a date of December 31 will count for that calendar year.
- Make sure the charity you donate to is a qualified charity. The IRS offers donors Select Check, a site dedicated to helping you find charities that are qualified for tax-deductible end-of-year donations.
- You’ll need to itemize your deductions. If you take the standard deduction, you can’t claim a donation.
We’ve made it easy to be strategic your charitable donations. Check out our tips for tax-savvy giving to make sure you’re getting the right deduction for your end-of-year donations.
Of course, donations aren't necessarily about tax deductions. Make sure you donate to a charity that resonates with you. If you love animals, donate to the ASPCA. If you believe in affordable homeownership for those in need, donate to Twin Cities Habitat for Humanity.