The holiday season hits Americans just as the tax year is coming to an end. While most people are distracted with buying gifts for their friends and families, they could be enjoying tax deductions by making smart year-end gifts:
- Choose a qualified organization. When ready to make your gifts, choose organizations, charities, or research funds that qualify to receive deductible contributions. Registered non-profits are great organizations to make donations to and the IRS offers a simple searchable database on their website. You can donate to exempt organizations in your area or around the country.
- Use credit. If you have already exhausted your holiday spending budget, but you know you will have extra cash after the New Year, use your credit card to make charitable donations. All charitable donations made in 2012 may be deducted from your 2012 tax returns, regardless if you choose to pay the balance in 2013 and beyond.
- Use the correct forms. If you are gifting as an individual, make sure you qualify for gift deductions. Individuals who file a 1040A or a 1040EZ are not eligible. Charitable contributions can be deducted for individuals who use a 1040 Schedule A.
- Canceled checks
- Bank statements
- Credit card statements
- Donate clothing, household products or other property that is valued at over $250
- Make non-cash donations that exceed $500