After back-to-back storms pummeled Texas, Florida and Puerto Rico, many people upped their charitable contributions for 2017. Now it’s time to reap the tax benefit.
Daniel Borochoff, president of CharityWatch.org, predicts donations could surpass last year’s record high, driven primarily by overall economic growth, although the recent disasters will also play a role.
“The giving climate will be heightened,” he said.
And while taxes might not have been at the forefront when providing aid, those charitable donations to qualified nonprofit groups are tax-deductible if you itemize your return instead of taking the standard deduction.
Generally, you can deduct up to 50 percent of your adjusted gross income in charitable contributions, but deductions can be limited to 30 percent of your income in some cases.
If you’ve volunteered your time, you can deduct the entire amount of your mileage, parking, tolls, train or bus ticket and even airfare if your travel was to exclusively pitch in at a recognized charitable organization.
If you’ve made a noncash gift, such as food, first aid or supplies, you should keep a receipt of the donation, a note of the organization’s name, and the date and fair market value of all noncash goods, in order to get the deduction come April.
If the value of a non-cash gift is more than $5,000, like a car, you will also need a certified appraisal. Then you can deduct the fair market value or appraisal value, whichever is higher, according to Lisa Greene-Lewis, a CPA and tax expert at TurboTax.
There are a few tricks, too, when it comes to the tax benefits of giving assets to charity, like avoiding capital gains tax on investments by giving stocks or other items that have grown in value.