Now or Later? When to Make a Charitable Donation During the Holidays
11/21/23 | Kinsey Love, Digital Marketing Manager
Of course, a good deed is indeed its own reward. But as a bonus, you should know that tax benefits are in store for those who give. With the holiday season around the corner, now is a great time to donate to those in need. And while getting a boost on your tax return isn’t your primary incentive for giving, knowing how—and when—to make your donation can make a difference when tax time rolls around after the New Year.
In simple terms, a gift to a qualified charitable organization could entitle you to a deduction against your income tax, but you must itemize your donations to take the deduction. However, if your donations aren’t greater than the standard deduction, it would be more beneficial to take the standard deduction. So do the math and see if the itemized charitable deduction is worth your time.
When should I donate?
The timing of your donation matters in terms of how you do your taxes. The rule is simple enough: a contribution is deductive in the year in which it is made. So if you’re in a charitable mood during the holiday season, you might want to consider when you make your donation. If you want it to count toward your 2023 taxes, you should make the donation around Thanksgiving or Christmas. If you want your contribution to go towards your taxes for next year, then hold off until 2024.
What about clothing donations?
You might also be gathering some of your used clothing or home goods as part of a clothing drive or other act of do-goodery. A large donation might be worth taking the time to itemize and document properly, which might include taking some pictures of your donation. Don’t forget to grab a receipt from the organization to which you donated; you will need to include it in your tax return.
Do I need a receipt for a cash donation?
Cash donations also require a receipt to verify their legitimacy. Even dropping a bit of spare change into a collection bucket can be deducted from your taxes. In the event of an audit, it might be tricky to track down Santa Claus, who was faithfully ringing a bell next to the bucket, but little acts of charity likely won’t have an impact on your tax deduction. If you make a donation and intend to itemize it on your taxes, it’s perfectly acceptable to ask for a receipt or a written acknowledgment of your donation, the date of donation, and a statement stating you received nothing for your gift.
Who can I give a tax-deductible charitable contribution to?
If taxes are on your mind while you donate, remember that charitable contributions only count for deductions if they go toward a qualified recipient. Gifts to individuals do not count on tax deductions but don’t let that hold you back from any donations you wish to make to someone in need. Consider consulting a tax adviser for additional information regarding charitable donations and deductions.
If you need tips on finding a cause to donate to, check out this blog post here.
A few more ideas for giving this season:
- Donate to Wasatch Adaptive Sports who empower people with disabilities to realize their potential through outdoor recreation.
https://wasatchadaptivesports.org/endofyear - Warming Cache Valley with USU Drive
Bring donations to any Cache Valley Altabank location to help the William A. Burnard Warming Center through this winter season. You can drop off your donations from December 6 - December 22.
ABOUT THE AUTHOR
Kinsey Love is the Digital Marketing Manager at Altabank. She specializes in content creation and strategy and enjoys all activities you can do in the mountains.