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William Perez

Tips for Donating Money to Charity at Year-End

By December 20, 2011

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Many people are generous during the holiday season and donate cash to charity. Donating can also be a savvy tax-move at the end of the year, since charitable donations are generally tax-deductible. Here's some things to remember when donating money.

Get a receipt. In an audit situation, the IRS will not allow a deduction if you don't have a receipt from the charity. A canceled check, bank statement or credit card statement is sufficient proof for small donations. For donations of $250 or more, obtain a written acknowledgement letter from the charity.

Verify the charity. Not all non-profits qualify for the charitable deduction. Only 501(c)(3) organizations qualify to receive tax-deductible donations. You can check whether an organization has obtained 501(c)(3) status by searching the IRS database called Publication 78. Note that this database doesn't contain churches and other religious organizations, which also qualify to receive tax-deductible donations.

Donations are deductible in the year donated. Donations must be made before the end of the year in order to be deducted on this year's tax return. IRS instructions clarify that checks mailed this year will count as a deduction for this year and that a donation made by credit will count for a deduction this year if the charge is posted to your account this year.

JoAnne Fritz, About.com's Guide to Nonprofits, offers additional tips for holiday giving.


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