The holidays have come and gone, but don’t let that stop you from giving to your favorite charities. They are always in need of generous donations and contributions to support their mission and cause, which is why it’s important to give all year round.
But did you know that when making a charitable donation, charities are not the only ones who benefit? Your financial portfolio does too, particularly when tax season comes along. It’s a win-win!
Here are three ways you can maximize your charitable giving.
Discover All The Ways To Give
Monetary donations are a great way to support your favorite charity. However, there are other ways to give that are not in the form of cash, such as things around your house that you no longer need. Go through your closet and dresser drawers and get rid of clothes you haven’t worn in years, dropping them off to Goodwill or Amvets. Look through your children’s toys, determine which ones they don’t play with anymore, and bring them to Toys for Tots or your local fire station. Dive into your pantry to see what packaged foods (canned or boxed) you can get rid of, and deliver them to your local food bank.
Giving non-cash items allows you to help someone in need even when your monthly budget is tight. Plus, you get the added benefit of having a decluttered house as an end result.
All of your charitable contributions can be filed with your taxes, qualifying you for certain tax deductions, reducing your overall tax bill. Make sure to always ask for a receipt any time you give a donation (cash or non-cash) and file it away in a designated spot in your house where you will never lose it. Once tax season is here, bring your receipts and your paperwork to your CPA so you can get an accurate picture as to which tax deductions you qualify for. Always include a copy of your receipts with your tax forms as proof.
Know Your Deductions
It is important to determine which is more advantageous for you: claiming the standard deduction or going for the itemized deduction. For 2020, the standard deduction is $12,400 for singles, $18,650 for heads of household, and $24,800 for couples filing jointly, (1) If you know your mortgage interest, property taxes, and charitable contributions will exceed your standard deduction, it is advisable to opt for the itemized deductions instead. This is where you would get the opportunity to list all of these items in detail, but beware, you will need to have statements and receipts on hand to prove that your numbers are correct. However, if you know your itemized deduction list would be less than the standard deduction, then it would be more beneficial to just claim the standard deduction
Go A Little Further
Depending on the current state of your financial portfolio, there may be other ways to maximize your charitable contributions even more. We at Security Financial Management would be more than happy to do an assessment on your numbers. Simply schedule a call with our office and we can get started.
Michael Allen is the Managing Partner and Financial Advisor at Security Financial Management and has spent over 20 years helping clients achieve their goals and stay on track for retirement. Mike graduated from the University of Central Florida with a bachelor’s degree in business and is still a loyal Knights fan! He also holds the Certified Financial Planner™ (CFP®) and Certified Trustee of the Florida Public Pension Trustees Association (FPPTA) designations and Series 7, Series 66, life, and variable annuity license and is an active member of the Financial Services Institute. Outside of the office, Mike is passionate about being involved in his community and enjoys giving his time and skills to organizations such as Genesis House, Parrish Medical Center, and the Indian River City United Methodist Church. Mike and his wife, Susan, live in Cocoa, Florida, with their two children. To learn more about Mike, connect with him onLinkedIn.
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Security Financial Management is independent of ProEquities, Inc.
ProEquities does not render tax, legal or accounting advice. Please consult with your CPA or other appropriate advisors on all matters pertaining to legal, accounting or tax obligations and requirements.