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INSIDE THIS ISSUE
1 The Procrastinator’s Ultimate Christmas Shopping Guide 2 3 Fool-Proof Ways to Pay for the Holidays Without Going Broke Why Estate Planning Is the Best Gift You Can Give a Loved One 3 5 Ways to Make Your Holiday Extra Eco‑Friendly This Year Chocolate Pie 4 Do You Know Your Tax Benefits for Giving to Charity?
DO YOU KNOWYOUR TAX BENEFITS FOR GIVING TO CHARITY?
Whether because of financial, health, or mental stress (or all the above), 2020 has hit us all hard. The pandemic and wildfires have affected the morale of local economies and communities deeply throughout the country. That is why you should consider helping your friends and neighbors in your community by donating to local nonprofits. And by giving, you also receive, too! You might already be familiar with the fact that, if you itemize deductions, any gift to a qualified charitable organization may entitle you to a charitable contribution deduction against your income taxes this year. Your donation will be considered deductible in the year in which it is paid. For example, if you make a contribution with your credit card, it will count toward the year you made that contribution, even if you paid it off a year later. What you might not know is that the IRA Charitable Rollover offers tax benefits to those who qualify. If you are 70 1/2 years old or older, you can donate up to $100,000 to charitable organizations directly from your IRA without that donation being counted as taxable income when it is withdrawn. (To qualify, contributions must come from a traditional IRA or Roth IRA, and they must be made directly to
a qualified charitable organization without receiving any goods or services in return.)
But you can help in more ways than giving money! Donate your spare used items to charity. You will have the advantage of filing a deduction for the full fair-market value of the donated property. You will not be taxed on appreciation of the goods, so you will essentially receive a deduction for an amount you never reported as income. So, do not throw any of your old clothes away! Someone in your community might be able to use them.
Of course, that does not mean you can contribute just anything lying around. The IRS only counts contributions in “good condition or better.”
Keep in mind that while most charitable organizations qualify for charitable contribution deductions, not all do. And no matter what, keep all documentation for your donations! Helping to make the world a better place can also make your life a little easier when tax season rolls around.
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