KNOXVILLE, Tenn. (WATE) – Like many nonprofits in the area, Knox Area Rescue Ministries (KARM) is gearing up for the holiday season and the usually heightened spirit of giving.
Gifts, donations, volunteer time, and more can be considered as charitable contributions.
KARM shared with WATE 6 On Your Side that there are several ways to give and help those most in need in our area around the holiday season – and tips for how:
Holiday donations and tax write-offs
In filing federal taxes, one can claim charitable contributions for itemized deductions.
When giving to a charitable nonprofit, make sure it’s a U.S.-based 501(c)(3) that is verified by the IRS.
Donating goods to thrift stores and charities that qualify as tax-exempt can also count as tax deductions.
Using your IRA or 401K for donations
In filing federal taxes, one can claim the standard deduction and give money using funds from an IRA or 401K account.
With this move, you save taxes and the charity gets the funds, tax-free.
This move can be beneficial for those over the age of 70 with required minimum distributions – as it can lower your taxable income and sometimes may keep you under the limits where Social Security income is not taxable.
One cannot use their IRA or 401K funds for donations if they claim itemized deductions.
Also – one can consider giving highly appreciated stocks.
Track volunteer miles and keep receipts
Volunteers working with a charity are able to receive a deduction for the miles driven. Keeping track, volunteers can receive 14 cents per mile driven in service of charitable organizations.
When making donations, ask for a receipt. The IRS requires a receipt for donations over $250, and in most cases, receipts are for records only. However, they are crucial in tracking donations if requested during an IRS audit.
Volunteers cannot receive a deduction for the value of the time spent.
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