The holidays are here ladies and gents and that means it’s time for holiday shopping. Whether you are headed to the stores for Christmas presents, Chanukah surprises, Kwanza gifts, or all of the above, shopping can be stressful for everyone. I remember a Seinfeld episode where George was fed up with people giving gifts to charity so he created his own, the “Human Fund” and encouraged people to donate to that. Now, while setting up your own charity is ill advised, and quite possibly illegal, there are other options. Any donation that you make to a charity (as long as it is approved by the IRS) can be taken as a deduction on your taxes.
Now comes the interesting part. Let’s say that Sally makes a donation to the American Cancer Society on John’s behalf and gives him a certificate acknowledging the donation as a holiday gift. Who can take the tax deduction? Well while John can enjoy the warm hearted nature of the gift and might be very appreciative, as long as Sally maintains record of the donation SHE gets the deduction. Keep in mind that a deduction can only be taken by the person making the donation and can only be taken by one person. In essence, Sally reaps the benefits for her Christmas gift…sounds pretty good right? Make sure that if you choose to make a donation and give it as a gift you research the charity and ensure that the donation is tax deductible. So long as that is the case you can enjoy the benefits of giving gifts that really do give back.
TaxSlayer.com’s donation tracker can help you categorize your donations and be ready for tax season. Make sure to check it out today by registering on TaxSlayer.com.