By Christina Williams – Junior Achievement of the Eastern Shore
Giving during the holidays makes us feel as if the new year and the new start will help rejuvenate our souls, and keep us feeling that good-will-to-mankind imperative throughout the year. Letting that charitable urge slip past may not only diminish seasonal cheer, however, but may potentially diminish your tax refund. A donation to a 501(c)(3) non-profit up until December thirty-first can be taken as a deduction on your 2014 tax return, even if the check is cashed in the New Year. Waiting until after January first means waiting all year to take that deduction your generosity has earned. Below are a few more ways to help you to financially wrap up 2014, and plan your year-end contribution.
Gather your Papers
Be sure you have all of the documents you will need when it comes time for tax preparation. Give yourself time to locate or obtain copies of papers such as proof of all income (wages, retirement/social security payments, winnings, jury duty, and state tax refunds); additional income deductions (business, farm or rental income); receipts for itemized deductions; and any expenses that may give you a credit, such as dependent care and energy efficiency home upgrades. Ensuring you have all of these papers in your possession and organized now instead of when you are facing a filing deadline in the spring will save you time, frustration, and help you avoid pitfalls in your tax return.
Talk with a Financial Advisor
When it comes to your money, nothing makes more sense than getting professional advice on how to manage it. Just as we should not try to perform major surgery on ourselves, we should not attempt to navigate the complex world of money management without a competent professional in our corner. A financial planner can assess your individual financial needs and goals and design a personalized strategy to get your hard earned money where you want it to be, when you want it to be there. Having a plan to get the most out of this year’s money and poise it to do even better next year will help grow your wealth much faster.
Plan your year-end contribution
If you have a tendency to procrastinate in your giving, you’re not alone. According to Blackbaud’s 2014 Charitable Giving Report, over one-third of all charitable donations occur in the last three months of the year, 17.5% of them in December alone.
Be sure your chosen charity qualifies. Charitynavigator.org reminds us that even if it is a tax-exempt organization, the donation will not be eligible if it is gifted to a foreign government or charity, or even to certain private foundations. Lists of eligible charities exist all over the Internet. An extensive list can be found at wwwIRS.gov. It is essential that you know beforehand if you can take deductions in the first place. If you are filing a 1040Ez, then you must claim the standard deduction and not submit an itemized deduction, which means you will not be able to claim your charitable giving. For more information on how to maximize your charitable giving, the IRS has an in-depth page on the rules of donating. Checking with your tax professional or financial advisor will always get you the correct guidance.
If you take a moment out of the year-end celebration chaos to prepare for the financial closure of the year, you will find an easier time of it come April 15. And taking stock of what you have now, and what others need now will help you realize the best time to give is now. With online donations so convenient in this modern era, giving in the last days of the year is as simple as a button click.
Christina Williams is the Marketing and P.R. director at Junior Achievement of the Eastern Shore, a 501(c)3 nonprofit dedicated to teaching age-appropriate financial literacy, workforce readiness, and entrepreneurship to over 6,000 local K-12 students annually. Through enthusiastic volunteers and charitable donations from individuals and businesses, Junior Achievement of the Eastern Shore continues its mission to making a difference in our future communities today. www.easternshoreja.org.
