The holiday season is filled with family, fun, and giving.
Charitable giving has become a regular tradition for our family. There are several charities that are really important to us, and without regular donations they wouldn’t be able to do the great work they do.
Many people give of our time, talent, and treasure during the holidays. Based on a recent study, 3 out of 5 people plan to participate in charitable activities. Whether it is volunteering at the school or church, donating clothes and toys, or participating in drives- charitable giving is an important valued staple.
There are some that give monetary donations as well. Did you know that financial donations can be a tax benefit and may reduce your tax liability? This is often overlooked when filing your taxes, but it is important to track your donations throughout the year so that you can use them at tax time.
Here are few tips through the giving season:
1. Don’t Wait: Financial donations must be made by December 31st to be eligible for a 2023 income tax deduction. Keep a record of donations over $250.
2. Look for Company Match and Drives: Many employers and charities alike also sponsor charitable gift matching programs or campaigns, which can increase your impact with no additional out-of-pocket costs.
3. Select the Best Type: You can donate cash, appreciated stock, bonds, and mutual funds. These donations may improve your charitable tax deduction to reduce your tax liability.
4. Make it Valued-Aligned: Think through which organizations align with your and your family’s interests, and encourage others to add a charity to their wish list.
5. Consider a Donor-Advised Fund: You can make a single donation of cash, stock, or other assets to be eligible for an immediate tax deduction.
Beyond being an act of generosity, gifting ensures that a significant portion of your wealth is preserved rather than diminished by taxes. No matter how you choose to give this year, your generosity is always in season.
Have a safe and happy holiday season!