If you're looking for a way to reduce your income tax liability, consider incorporating one or more of these tax deductible donating ideas into your plans for the year. Making qualified gifts to a charitable organizations helps you and your community at the same time.
Top 5 Tax Deductible Charity Donating Ideas
Everything from cash to clothing can be used by nonprofit organizations to help others.
Clean Out Your Closets and Share
There's a good chance you have items in your closets and cupboards you'll never use again. Whether it's clothes you've outgrown or pots and pans that never see the light of day, the very items that are causing clutter in your home could be put to good use by a nonprofit organization.
- Contact your local Goodwill, Salvation Army, or other charitable organizations in your area that accept these types of gifts to inquire about the best way to make your donation.
- Before you pack up the items, make a list of what you are giving so you have a record of your donation.
- When you drop them off, be sure to get a receipt for your gift.
- Attach the receipt to the itemized list and assign an accurate value to each item on the list. This documentation is necessary as back-up for any tax deductions you claim related to your gift.
Attend a Fundraiser Event
If you want to have fun while also supporting your favorite charity, consider buying a ticket to attend an enjoyable fundraiser event. Many nonprofits hold silent auctions, wine and food tastings, dinner dances, and other events throughout the year in order to raise money. The full ticket price for fundraiser events is not tax deductible. For tax purposes, the portion of your ticket above and beyond the actual value of the occasion you are attending is what you can write off.
Pledge Support to a Walk or Run Participant
Charitable groups often hold walk or run events as a way to raise money and increase awareness of their work in the community. They recruit people to participate in the event, and participants are responsible for enlisting financial support from donors. If you're looking for a way to keep your tax liability in check, sponsor someone who is participating in the event.
While many types of nonprofits hold these types of events, they seem to be particularly popular among healthcare charities such as:
- The American Cancer Society's Relay for Life benefits cancer research.
- The Leukemia & Lymphoma Society's Team in Training events include walks, climbs, and cycling races.
- Breast cancer awareness walks increase awareness and raise money for research.
Donate a Vehicle That You No Longer Need
You can convert automobiles and other types of vehicles, like boats and RV's, into tax deductions by giving them to qualified charitable entities. In addition to enjoying the tax benefits, you'll get these large items out of your own way and reduce ownership expenses.
While not all nonprofits accept vehicle donations, there's a good chance one or more organizations in your area would love to give your vehicle to a person in need. A few places you may want to check with if you'd like to make this type of contribution are:
- One of the most well-known nonprofits is 1-800 Charity Cars where vehicles are given to needy individuals or sold with proceeds benefiting the organization's operations.
- Car Angel accepts cars and boats, and donors get to choose what charity benefits from its sale.
- People in the New England states can check in with Good News Garage.
Make a Cash Contribution
Charities are more than happy to take cash contributions from donors. If you're looking for a no-fuss way to reduce your tax liability while also supporting your favorite charity, consider simply writing a check to the nonprofit organization of your choice. You can designate how the funds you share are to be used, or you can make a no strings attached gift that enables the group's executive director or Board of Directors make that decision.
Making a Difference for You and the Community
Sharing your success with nonprofit organizations is a great way to give back to the community where you live and work. No matter which donation you make, you'll benefit come tax time, and the organization you choose to support will benefit right away.