tax breaks — December 12, 2016

Charitable Donations as Christmas Gifts

by Susannah McQuitty

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Swirly lettering says Season’s Givings.

’Tis the season: You know it because you haven’t been able to escape grocery-store Christmas albums playing overhead for the past month or so, and the dairy section is only just now getting restocked with whipped cream after Thanksgiving (pumpkin pie just isn’t complete without it).

You know the holidays should be a celebration of something bigger, but sometimes it’s hard to see past the flashy commercials and unrealistic holiday romance movies on a loop, dripping with tinsel and garland. If that’s the case, let’s talk about the beauty of giving again – specifically three ways to do some charitable giving – and how that can really give you a boost when you do your taxes in a couple months.

Giving donations as a family

Three hand-drawn stockings hang in a row, with Charity written on the middle one.

Giving to a charity as a family, whether you’re newlyweds or having your first child, is a great way to remember what’s truly important. Whether your donations are used to provide for veterans in need or a local food bank, taking care of those who are less fortunate this season is a great way to celebrate the winter holidays.

Pledging donations as a gift

Got that one friend who is just impossible to buy for? Donating to a charity chosen by a friend benefits you both: Your friend gets to support (and maybe even discover) a charity, and you get an inside look at what’s really important to them – which can help when you’re looking to get them presents next year! And even if your friend needs some time to think about it, I bet that bottom dollar Annie always talked about that you’ll have a ton of options to choose from when you get an answer.

Requesting donations as a gift

Last but not least, there’s the option of telling your friends and family to make a donation to a charity of your choice instead of buying you a gift. Set a monetary goal and tell people about it, or take nickels and dimes and just see how far you get. It’s a great way to raise awareness for the cause you’re supporting and remember to love each other in lasting, sustainable ways.

Hand-drawn image of laptop says 1040.

The gift that keeps giving

Deducting what you donated to charity can make a big difference in the amount you owe in tax in April, and Christmastime is perfect for year-end giving.

Basically, the deduction subtracts a percentage of your donation amount from your taxable income. You won’t get the money back, of course, but you’ll owe less on your taxes when you file. Plus, if you write a check and give it to a charity in December, you can still count that money as donated even if the check isn’t cashed until January.

To get the deduction, you’ll need to itemize deductions on Schedule A. Be aware, though, that your total itemized deductions might not add up to more than the standard deduction. In that case, you take the standard deduction instead. And if you file with 1040.com, don’t sweat it: We’ll determine which one will get you the biggest refund and we’ll handle it from there.

How’s that for spreading good cheer?

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