December is by far the most popular month of the year for charitable giving. Partly, that's because donors, moved by the holiday spirit, feel compelled to help those in need, but it’s also the last chance to get the deductions on your 2012 tax return.
Charities know this which is why you get a lot of mail and ads from them this time of year. If you're looking to give in the next couple of weeks, here's what you need to know.
-- Deducting charitable contributions only matter if you itemize your deductions. If you take the standard deduction, it doesn't matter.
-- You can deduct charitable gifts you make in 2012 even if you don't pay the bill until 2013. As long as your credit card statement shows the charge in 2012, you should be fine.
-- If you're donating cash, be sure to get a receipt as you can't deduct without one.
-- Make sure the organization or individual you're donating to is an official charity.
-- Cash you put into the Salvation Army bucket isn't deductible. Money you donate online with documentation is deductible.
-- If you're donating goods, you want to over-document. If you think what you donated is valuable, take pictures and write detailed notes, so you can deduct the fair “used” value at tax time.
-- Microloans made on sites like kiva.org are not tax deductible because after six months or a year, you get your money back.
-- Whenever you donate and get something in return, you have to subtract the value of that item. If you get a t-shirt for donating $100 to your local public radio station, that t-shirt is worth $14, so you can really only deduct $86.
It doesn't have an impact on how much money you can deduct, but if you want to know how much of your money goes to administrative costs, you can learn more about charities at www.charitynavigator.com.
As always, with any complex tax issues, you should consult a professional.