Blog: Financial Organizing Made Easy & Fun
Open your heart and wallet during the holiday season
Here are 3 simple steps for ensuring your chartiable contributions help you keep that warm and fuzzy feeling come tax time this spring!
The busy holiday season is rapidly approaching. For many, the holiday celebrations and family traditions involve the giving of time, resources, and money to those less fortunate. The end of yet another calendar year also signals an important time for many charitable organizations that depend upon holiday contributions to meet their fundraising goals. Do you plan to make contributions to your favorite charity or organizations this year? Now it the time to send in those pledges and contributions before the calendar flips yet another year.
Charitable giving is a great opportunity to support the many causes, organizations, and places that are in need of support. As a supporter you have the opportunity to receive a deduction from the IRS for you generosity but follow these follow these guidelines otherwise you might be the one feeling cold and lonely come the spring time tax season.
#1 – Get to know your charity and their charitable status.
Ask your favorite organization about their charitable status to ensure your donations are to a qualified organization. You can also call the Tax Exempt/Government Entities Customer Account Services line at 1-877-829-5500 to research an organizations status. The IRS publication 78 lists many of the qualified organizations.
#2 – Decide how much and how you will contribute.
For 2007 some new tax rules when into effect. These new rules require written documents from the charity or a bank record, such as a cancelled check, for cash contributions of any size. This means you'll need to save ALL those receipts, not just the larger donations. Purchase a small plastic envelope to gather those small donations throughout the year. Also, consider writing checks for contributions over $250 because special rules apply for larger amounts. Ask your tax professional about the required documents.
#3 – Think carefully before donating clothing and household goods.
In the spirit of holiday giving, think carefully about the usability and remaining life in those items you plan to donate. Unfortunately, many organizations that accept clothing and household goods are to often burden by unusable donations. It's estimated that nearly 5% of annual clothing donations must be discarded because of their poor condition. If that fact is not enough to make you stop and review your donations more carefully then consider this. The Pension Protection Act of 2006, the same one that changed the rules for recordkeeping on cash donations, also changed the requirements for deductions of clothing and household goods. According to the IRS "deduction for these contributions will be allowed only if the items are in good used condition or better." Keep this simple reminder close, if you are not proud or in doubt, then just leave it out of your donation pile.
For many the spirit of giving is simply a gift given to those in need. In this holiday season, remember to open your heart and wallet to this less fortunate. Remember to keep the holiday glow well into the New Year by following these 3 simple steps for making powerful and meaningful charitable contributions.
For more information on the recordkeeping requirements, required forms, and instructions visit www.irs.gov to order free copies of Publications 78, 526, and 561.
posted on: 11/13/2007 11:30:00 AM by Nanette Duffey
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Financial Organizing Made Easy & Fun
by Nanette Duffey
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Nanette Duffey, owner of Organized Instincts, LLC provides professional organizing and money manager services to individuals, families, and small businesses. Before founding Organized Instincts in 2005, she held several finance roles at GE and earned a B.S., Financial Management, from Clemson University. Nanette has appeared in the media and regularly presents to a variety of civic and community organizations. Nanette currently serves as the Treasurer for the NAPO Georgia (National Association of Professional Organizers) chapter. Nanette loves to travel, football, photography, ballet, and learning to cook.
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