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The holiday season is always a great time of year to be charitable, but you don’t need to send yourself to the poor house in the process. There are many ways to make the most of what you already have, and turn what you don’t need into a charitable donation. For many, the giving process is not thought out and cost more than is necessary. Having tax saving tips can make a huge difference when it comes to the holidays, make sure you have a plan.
Here are some Tax Saving tips to save big and simplify your holiday shopping
1. Holiday décor, arrangements and food
After the festivities of your holiday party are over, and your friends and family have left, do an inventory of what is leftover. Many don’t think of this tax saving tip, but you can donate things left over from your holiday party. Food, flowers and reusable decorations that would otherwise go to waste can be brought to a homeless shelter, a women’s center or similar non-profit organization. In doing this you will not only be spreading holiday cheer to the less fortunate, but with receipt you’ll be able to take a tax deduction this year’s tax return for the value of the donated goods.
2. Toys
There are many local charities this time of year doing toy drives for children. Make the most of your donations by seeking out ones that are also tax deductible. One of our tax saving tips is to use the U.S. Marine Corps Reserve Toys for Tots. It’s not only a great charity that helps children in need but your donations are also deductible for the year if your donations are in before December 31.
3. Donating canned and boxed foods
Opening your pantry, there are definitely canned and boxed foods that you constantly see and rarely, if ever, use. December is the perfect time of year to round up all the cans, bottles and boxes, put them in a paper bag and drop them off at a local grocery store or soup kitchen. Some of these locations will give you a receipt that you can deduct at tax time. Helping out a family in need and cleaning out the pantry at the same time.
4. Clean out your closet
Clean out your closet of old clothes, sporting goods, books and other household goods that you no longer use. Bring in the New Year clutter-free. And all of those gifts you didn’t use last year can be donated to someone who may put them to use. It’s a trifecta; you have new, clean space, you are helping a family in need and if document your donations, you end it with a tax deduction.
5. Monetary contributions
For those who wish to make contributions of cash, checks or other monetary gifts there are special ways to record the contribution. You must make sure that the organization qualifies. If you are making a contribution of over $500 there are forms that you need to fill out and record. For more information on monetary contributions and their tax saving tips refer to Topic 506 on the IRS’s website.
Make the most of your holiday season and your charitable giving. By aligning your donations with tax deductions and other tax saving tips you will be able to save at tax time and through that, be able to donate more next year. For more information on tax saving tips and tax deductions, call the tax professionals at DeFreitas and Minsky LLP at (516) 746-6322 today!
