The appeals are arriving in the mailbox, the bell ringers are taking up their stations and we're reminded again how fortunate we are in a world where most people have much less. With high unemployment, fewer people are able to give and more are turning to charities for help.
If you're motivated to share what you have, warm feelings aren't your only potential reward. If you do things the right way, you could reap substantial tax benefits. Here are some tips to help you plan your giving:
Get a receipt. It's required for any donation of $250 or more. For smaller donations, a canceled check or a payroll stub will show your contribution.
The receipt should state the value of any goods or services provided in exchange for your contribution. An email receipt is just as acceptable as one that arrives by mail.
Know your recipient. Not everyone who asks for a donation deserves one. It's best if you know first-hand about a charity's good works. Also, check out Internet sites of nonprofit evaluators such as GuideStar ( guidestar.org ) and Charity Navigator ( charitynavigator.org ) or the Better Business Bureau ( bbb.org ).
Clean out your closets and give away items in good condition. If you itemize deductions on your tax return, make a list of your donations so you can value them. Some charities that accept used goods offer valuation guides on their websites.
Give appreciated securities such as stocks or mutual funds instead of cash. You avoid paying the capital gains tax, which is worthwhile even if you don't itemize. If you itemize, you also get a tax deduction for the full amount of your donation. Giving away securities is one way to deal with the problem of not having kept good records showing your cost. If you want to give away securities on which you have a loss, sell them first and donate the cash. That way you can take the tax loss, which doesn't do the charity any good.
Donate money directly from your IRA if you are older than 70 1/2. If your IRA custodian makes the check out directly to the charity, you never have to pay taxes on the distribution.
The down side is that you don't get to take a charitable deduction. This technique is particularly valuable for people who don't itemize deductions. Do it by mid-December to avoid the last-minute rush.
Consider making next year's contribution in advance. Your favorite charity or religious institution probably would be happy. This can be a great strategy if you're in a higher tax bracket this year than you will be next year or if you only itemize in alternate years, taking the standard deduction in between.
Consider a charitable gift fund or foundation. Want to get a tax deduction right now but have your favorite charity get the money over a period of years? A fund or foundation can be your intermediary.
One also may be able to help if you want to give a gift such as real estate, life insurance policies or closely-held stock that your chosen charity might not be equipped to accept.
Many large mutual fund companies and brokerage firms sponsor charitable gift funds. There also are foundations that serve specific geographic areas or types of charities.
Get advice. Talk to your tax or financial adviser if you're contemplating a large gift. Your circumstances might make a difference in your giving strategy.
Give your time and talents. Many organizations welcome volunteers. Hands-on help might be a particularly good idea if you aren't able to give much money.
Getting involved can be psychologically rewarding -- good for you as well as for the charity. And your out-of-pocket costs may even be deductible.
(Helen Huntley, a former St. Petersburg Times personal finance editor, is a fee-only financial adviser with Holifield Huntley Financial Advisers in St. Petersburg.)
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