Mountain Home, Arkansas
104 E. 1st St.
Mountain Home, AR 72653
870-425-6066

A Guide to Charitable Donations October 14, 2020

Mountain Home, Baxter
A Guide to Charitable Donations, Mountain Home, Arkansas

Charity work is essential for helping individuals in need, advancing global causes, and bringing awareness to important issues. However, widespread concerns about the legitimacy of charities and individual worries about how to account for donations during tax preparation may keep people from giving, even if they want to. This guide discusses how to donate to charities effectively. 

4 Tips for Making Charitable Donations 

1. Find Legitimate Organizations 

If you’re passionate about a cause, then chances are that you’ll find multiple charities that are actively seeking out donations. Sadly, it’s common for fraudsters to use fake charities to perpetuate illegal schemes, so you need to do your homework before donating. Be wary of any organization that only allows for cash donations, doesn’t provide information on what they’re doing, or guilts you into giving. Charities that use these tactics may not have the right motivations. You can also look at organization ratings if you need help finding a legitimate charity. 

2. Decide How Much to Give 

tax preparationThe structure of your charitable giving is entirely up to you. Many people view charitable donations as an investment, so they’ll designate a certain amount or portion of their income to charity each month. Following a structure keeps things simple for tax preparation and helps you build a habit of giving. However, you can choose to donate on a one-off basis or rotate the charities you give to depending on your preferences. No matter what you do, be sure to track your donations. 

3. Look for Transparency

Honest organizations are often willing to post reports that show exactly what donations were received and how the funds were used. A common complaint about charitable giving is that donations are often used to partially offset an organization's administrative fees or operating expenses. Understandably, you want your funds to go directly to the cause you support, so look for charities that allocate most of your donation to helping those in need. If you have questions about how funds are used, reach out to the charity.

4. Plan for Tax Time 

Charitable donations are tax-deductible, but it’s important to maintain records to have a log of who you donated to and when. Get an itemized receipt for all donations so that your tax preparation professional can properly account for your charitable giving. Consult with them to see what forms you’ll need to submit to the IRS since paperwork can vary depending on how much you’ve donated.

 

If you’ve made charitable donations, it’s essential to report these properly on your tax forms. Tax professionals at The Callen Accounting Group, PLLC, in Mountain Home, AR, can assist you with tax preparation. They’ve helped individuals and businesses in the Twin Lakes area with tax needs since 1973. Visit their website to learn about their services, or speak to a representative at (870) 425-6066.

Other Announcements, Events and Deals from The Callen Accounting Group, PLLC
Health Savings Accounts For Your Small Business, Mountain Home, Arkansas
Health Savings Accounts offer a way to set aside money on a pre-tax basis to pay for qualified medical expenses.  Here’s a review at what an HSA could mean for your business, as...read more
Do You Want To Withdraw Cash From Your Closely Held Corporation At A Low Tax Cost?, Mountain Home, Arkansas
Are you the owner of a closely held corporation and want to take cash out?  For tax purposes, you probably want to avoid a dividend distribution.  Here are some alternatives read more
Should I Cash Out My 401(k)?, Mountain Home, Arkansas
If you’re like most Americans, you might not have a hefty savings account to fall back on in times of duress. Therefore, when hit with high medical bills or emergency home repai...read more
Tax Responsibilities If Your Business Is Closing Amid The Pandemic, Mountain Home, Arkansas
There are a number of tax obligations that must be met when a business closes its doors.  Sadly, because of COVID-19, many businesses are facing this reality.  Here are the...read more
Understanding The Passive Activity Loss Rules, Mountain Home, Arkansas
The passive activity loss rules can be complex and trip up some taxpayers.  Here are the rules read more