The holidays inspire many people to donate to charities. Charitable donations can result in valuable tax deductions, but not all contributions lower your tax bill. To help you file your tax returns accurately, below are a few tips for claiming deductions after a donation.

4 Tips for Claiming Deductions From Charitable Contributions

1. Decide How Much to Itemize

You can only get a deduction if you itemize your deductible expenses on Schedule A. The value you can donate is also limited based on your income and filing status. The standard deductions in 2020 are $12,400 for single taxpayers, $24,800 for married couples filing jointly, and $18,650 for heads of households. 

2. Choose the Right Organization

Only donations to charities approved by the Internal Revenue Service (IRS) are deductible, so be sure the organization you choose has tax-exempt status. Most religious organizations qualify, as well as public parks, hospitals, and local parks. The IRS maintains a comprehensive list of approved organizations, so check the charity before making your donation.

3. Collect All Receipts

As with any deductible expense, you must be able to prove to the IRS that you made the payment. Whether you’re donating cash, used furniture, stocks, or other assets, always ask for a receipt or some documentation that includes the amount given and the name of the charity.

4. Give Appreciated Assets

Donating assets that have appreciated over time, like stocks or bonds, lowers your taxes in two different ways. In addition to writing off the fair market value of the asset, you’ll also avoid capital gains tax, which can substantially lower your liability. If you have any assets, consider using these for your donations.

Preparing your tax returns can be overwhelming, especially with frequent changes in the code. The accountants at Engelson & Associates offer detailed advice and personal attention to taxpayers throughout Holmen and La Crosse, WI. They will take the time to ensure you get every deduction you qualify for. Visit their website for more on their tax return services, call (608) 526-3437 to make an appointment in Holmen, or dial (608) 788-2181 to speak with an accountant in La Crosse.