In addition to carols, cookies, and cards, I always think of charitable giving this time of year. It’s important all year long but the holiday season makes you realize how fortunate we are and encourages us to give back.
Charitable donations are deductible business expenses and must meet specific guidelines as outlined by the IRS: https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions
Non-profit organizations are all in need of money, items, and time. Determining the value of your gift can be tricky. Donating money is easy, the amount you donate is written on your check or the amount in the envelope.
Donated items are a little trickier. The IRS states that the fair market value of the item can be deducted. This is usually what you paid for it. So if you donate some animal toys to a dog shelter, the value of your donation is the cost of those toys (save your receipt). Some property appreciates in value so talk to your CPA if you’re in that situation!
Time is a hot commodity that we all need more of, so donating your time to an organization is truly a gift! However, the IRS does not allow ‘time’ volunteered to qualify for a charitable deduction. You can deduct your documented, unreimbursed, out-of-pocket expenses incurred to volunteer. These are usually uniforms or transportation. As always, document, document, document!
The holiday season can be such a mix of emotions for all of us. Doing something for the people/animals/environment worse off than you is good for all involved…regardless of how it affects your tax return.
“Happy Holidays” Times A Million!
Jordan Ilderton, CPA
*Post and picture in memory of my funny little Pom Pom and sweet Stella Blue*