5 smart tips for year-end donations
Believe it or not, the end of 2018 has arrived, and it's time for year-end tax strategies. Here are five charitable donation tactics to consider if you want to boost your deductions for this year's taxes:
1. Audit-proof your claims. The IRS imposes strict substantiation rules for charitable donations. In fact, you're required to keep records for all monetary contributions, no matter how small. The best approach is to obtain written documentation for every donation.
2. Charge it. The deductible amount for 2018 includes charitable gifts charged by credit card before the end of the year. This covers online contributions using a credit card. So you can claim a current deduction for donations made as late as December 31.
3. Give away appreciated stock. Generally, you can deduct the fair market value (FMV) of capital gains property owned longer than one year. For instance, if you acquired stock 10 years ago for $1,000 and it's now worth $5,000, you can deduct the full $5,000. The appreciation in value isn't taxed.
4. Sell depreciated stock. Conversely, it usually doesn't make sense to donate stock that has declined in value, because you won't receive any tax benefit for the loss. Instead, you might sell the stock and donate the proceeds. This entitles you to a capital loss on your 2018 return, plus the charitable deduction.
5. Clear the storage space. The tax law permits you to deduct charitable gifts of used clothing and household goods that are still in "good used condition or better." Don't be so quick to discard items that can be donated to charity.
Contact us if have questions about maximizing your year-end charitable donations.