You can make errors, while giving a donation. You can possibly pick an organization without conducting a research to find later that they sold your contact details to marketers.
Big and small donors can avert troubles with the given tips
Avoid impulsive giving
- Many people end up donating to groups, who have forgotten the strong and god cause.
- Make sure to make a list and allocate specific amount to several major causes.
- It helps to gently turn down donation requests from co-workers, friends, or neighbors that are not included in the list.
Avoid overvaluing or overpricing
Best charities get rewarded but there are some IRS rules to be followed.
- Never expect full deduction on taxes.
- For example, you paid $900 for fund-raising concert event but the ticket value was $300. You get to $600, which is the main amount of contribution [$900-$300].
- Donating tanked stocks will not be helpful tax-wise.
- Donating stocks less than a year allows deducting the amount you initially paid.
- Holding stock for more than one year allows deducting fair market value.
- Gifting of tangible physical property to a charity, whose mission is related then only you get deduction of fair market value. For example, donating a painting to museum that displays art to public gets full value deduction.
Charitable lead trust for gift annuities
- Appointed trust pays a fixed amount to charity organization for specific term or life.
- When term ends, assets get passed on to heirs or the owner.
This is the best solution for income and tax break for many givers.