How to Write Off Buying Items for Charity on Your Taxes

The holiday season is a time not only when we purchase gifts for our loved ones, but we also think about the best ways we can give back to the world. After all, it’s important to remember to offer a helping hand during the holidays – and beyond.



If you’re thinking about buying items to donate to charity, here’s how to go about it so it’ll provide tax benefits.

Find a tax-exempt organization

You’ll first want to first a tax-exempt organization to donate to. Otherwise, if you give to a charity without this tax status, you won’t be able to write it off.

Navigate to the IRS’ website and use its Tax Exempt Organization Search Tool to find a charity of your choice. You can search by the organization’s name or the Employer Identification Number, the EIN.

Additionally, if you already have a charity in mind, you can look on its website and see if it’s a 501(c)(3) nonprofit and then confirm it using the IRS’ tool. Some charities you may want to research include:

  • Toys for Tots
  • Make-a-Wish Foundation
  • The Salvation Army Angel Tree
  • Operation Christmas Spirit
  • Christmas Spirit Foundation
  • The Wish Project
  • St. Jude Children’s Hospital
  • Your local children’s hospitals

You can likely find charitable organizations in your neighborhood that are also accepting donations for the holidays by reading local newspapers and searching for them on Yelp or Google.

Connect with the charity

You’ll need to do your research to find out what kinds of items the charity needs. Perhaps it wants toys, clothes, or home goods for its recipients in need. It may not be accepting items and will only want cash. You can find this information on the charity’s website or social media sites, or you can contact it directly.

When shopping for toys, make sure they are age-appropriate for the recipients; for instance, if the charity focuses on giving to babies in need, you wouldn’t want to purchase anything that could be a choking hazard.

A quick tip: If you purchase the goods at Target or another store with a rewards program, enter your rewards information so that you can benefit from your buys.

Write off your charitable donations

When you want to write off charitable donations, you can itemize them as deductions on Form 1040, Schedule A. Make sure you keep a receipt of your purchases. For donations worth less than $250, you’ll need a record that shows the organization’s name and address, the date and location of the donation, and a detailed description of what you donated. For donations worth more than $250, you need to ask the charity for a written acknowledgement of your donation that includes a statement that says whether or not you received goods or services in return, and a description and the value of the items you donated. Many nonprofit organizations will know exactly what kind of statement and receipt to give you, especially if they are well established.

Keep in mind that the IRS limits you to donating up to 60% of your adjusted gross income in charitable donations in 2021.

The bottom line

Donating to charity is always a great idea, but you want to do it in a way that will also lower your tax bill. By itemizing your deductions, you can owe less come tax time and give back to people in need – it’s truly a win-win situation.

The post How to Write Off Buying Items for Charity on Your Taxes appeared first on TaxAct Blog.



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