In conjunction with Black Friday, Small Business Saturday, and Cyber Monday, Giving Tuesday is rising as another important day to mark on the holiday calendar. Giving Tuesday, which falls on November 27 this year, was created by Belfer Center for Innovation and Social Impact in conjunction with the 92nd Street Y to encourage charitable donations and giving. Started in 2012, Giving Tuesday takes place on the Tuesday after Thanksgiving to kick off the holiday and end-of-year giving season.
For businesses and individuals alike, charitable giving is tax deductible, making it possible to give back to your community without creating financial strain. Here is some helpful information about making charitable donations, whether you’re donating on Giving Tuesday or at any other time of the year.
How can you make the most of Giving Tuesday?
- Make sure it’s an IRS-qualified charitable organization
Qualifying charitable organizations are nonprofit, generally with a 501(c)(3) filing status. These include religious, charitable, educational, literary, or scientific purpose groups or groups dedicated to the prevention of cruelty to animals or children.
In addition to the specific groups listed above, you can also deduct contributions to the following organizations:
- Public purpose donations to local, state, and federal governments (for example, to help maintain a public park)
- Donations to nonprofit hospitals and schools
- War veteran groups
- The Salvation Army, CARE, Goodwill, American Red Cross, Boy Scouts of America, Girl Scouts of America, and United Way
If you’re unsure if your charity is a qualified nonprofit, the IRS keeps a database of eligible charities and organizations.
- Get a receipt
For cash, checks, or other monetary gifts, be sure to get a receipt or keep another written record of the transaction. The receipt can include written communication from the organization, a payroll deduction, or bank record with the date and amount of the contribution. For monetary contributions over $250, you need this record plus information on whether you received anything in exchange for the contribution.
- The donation doesn’t have to be cash
You don’t have to donate money to get a deduction. Here are some examples of other types of donations that are also tax-deductible:
- Vehicle donations, property, stock, clothing, and household items all count as donations; the amount you can deduct is determined by their fair market value
- If you’re donating your time, you can’t deduct the hours you volunteer; however, you can deduct any out-of-pocket expenses you incur as you’re volunteering
- For businesses, event sponsorships and inventory or service donations count too
- Stay within the limits
There is a limit to the amount of money you can donate to charity each year. Many organizations fall under a blanket that only allows its donors to give 50 percent or less of their adjusted gross income. In addition, there may be a limit to how much you can donate if your income is more than a certain amount. To see the specific limitations to tax-deductible contributions, see the corresponding section in IRS Publication 526.
- Claim it on your taxes
In order to deduct a charitable donation, you must file Form 1040 and itemize your contributions on Schedule A of Form 1040. For donations of items valued at more than $500, taxpayers must complete section B of tax form 8283 and may need to have the items appraised by a qualified appraiser to determine their value.
For more information on how to correctly deduct charitable contributions, see IRS Publication 526.
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