Charitable Contribution Tax Strategies

Charitable contributions provide the greatest flexibility for most people because their timing is completely discre­tionary, as a rule.  Keep in mind that gifts to charit­able organizations are deductible when paid and that pledges alone don’t count, being deductible in the year that they’re fulfilled, not in the year that they’re made.

Within these guidelines, donors have some flexibility, in order to maximize their contributions:  

- accelerate payments by taking care of pledges to religious groups, schools, and other charities this year, instead of next
- donate before year-end the entire amount that you expect to give to your favorite charity next year
- count checks as deductions for 2014 as long as the payments are put in mailboxes in sufficient time for letters to be postmarked by midnight on 12/31/14
- credit card payments, whether for charitable donations, medical services, or business expenses qualify for 2014 deductions as soon as you authorize the charges
- consider borrowing to accel­erate the deduction; the tax savings may more than offset the interest expense of a short-term loan
- consider donating stocks, real estate or other investments that you’ve owned for more than 12 months and are worth more than you paid for them
- contributions of stock or other property are deductible for 2014 as long as the gifts are completed by 12/31/14


Another way to lower taxes is to clean out and donate the contents of your closets, attic, and garage now, rather than waiting until next spring.  Just make sure to get a receipt showing the fair market value of what you donate; otherwise, the tax takers may disallow all or part of your deduction.  If the charity doesn't give a receipt, prepare your own detailed description listing clothing, furniture, and so forth.

When you claim a deduction of over $500 for non-cash gifts of property like clothing and toys, complete Form 8283, available at irs.gov, and submit it with your return.


The instruction booklet that contains IRS tax forms offers this tax-saving tactic: “You can make a contribution (gift) to reduce the public debt.  If you wish to do so, make a separate check payable to Bureau of the Public Debt.”  The IRS notes that you can deduct this gift as a charitable contribution on next year’s tax return if you itemize your deductions on Schedule A.

 

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