Published November 1, 2019
Making charitable gifts is both an opportunity to express thankfulness for the blessings of life and an opportunity to make a difference in your community through a favorite charitable ministry. It's also an excellent way to reduce your tax obligation for the year.
A tax deduction for charitable giving isn't guaranteed just because you're generous. As with everything in tax law, it's important to follow the rules. By doing so, you can help ensure that your donations result in maximum benefits for you and the charitable ministries you support through your gifts.
The Internal Revenue Service offers the following reminders to help taxpayers plan their gifts to charity:
• Qualified charities. Only donations to eligible organizations are tax-deductible. Select Check, a searchable online tool available on IRS.gov, lists most organizations that are eligible to receive deductible contributions. In addition, churches are eligible to receive deductible donations. That is true even if they are not listed in the tool's database.
• Year-end gifts. Contributions are deductible in the year made. Donations by check count for 2019 as long as they are mailed in 2019. Also, donations charged to a credit card before the end of 2019 count for 2019, even if the credit card bill isn't paid until 2020.
• Itemize deductions. For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction.
• Record donations. The long-standing requirement of the IRS is that a taxpayer obtain an acknowledgement from a charity for each deductible donation (either cash or property) of $250 or more. Also, be aware that additional rules apply for a property contribution of $250 or more.
As you begin to look beyond 2019, you may also wish to consider arranging for future charitable gifts that result in immediate tax and other financial benefits. By doing so, you may be able to enjoy tax savings, increased income and other financial advantages today while providing for a significant charitable gift to a favorite Baptist ministry as part of your long-range planning.
Richard Carnes is president of the Kentucky Baptist Foundation.
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